DynTek Revenues Double With Positive EBITDA in Second Fiscal Quarter Company Announces 104% Revenue Growth, Improved Margins, and Positive EBITDA IRVINE, Calif., Feb. 14 /PRNewswire-FirstCall/ -- DynTek, Inc. (OTC:DYTKOTC:DYTKPOTC:DYTKW) (BULLETIN BOARD: DYTK, DYTKP, DYTKW) , a leading provider of professional technology services, advanced network infrastructure, voice over internet protocol ("VOIP"), and IT security solutions, today announced results for its second fiscal quarter ended December 31, 2004. Performance highlights for the quarter include: * Quarterly revenues of $20 million increased by 104% over the comparable quarter in the company's prior fiscal year. * Overall gross profit increased to 21% from 14% in the comparable quarter in the prior fiscal year. * The company achieved positive EBITDA in the quarter ended December 31, 2004, generating positive cash flow. Second Quarter Results Revenues for the quarter ended December 31, 2004 increased 104% to $20.0 million from $9.8 million in the comparable period in the prior year. The increase in revenue reflects results from the acquisitions of Redrock Communications and Integration Technologies, Inc. (ITI), as well as a 16% increase in revenues from existing operations over the same period in the prior fiscal year. Gross profit increased to 21% in the three months ended December 31, 2004 from 14% in the comparable 2003 period, primarily due to the sale of higher margin products in the company's solutions, higher service margins from the acquired businesses, and the sale of higher end service solutions. Positive EBITDA for the quarter equaled $0.2 million compared to an EBITDA loss of $1.7 million in the quarter ended December 31, 2003. The company's net loss under generally accepted accounting principles ("GAAP") during the period was $7.0 million compared to a net loss of $5.5 million for the quarter ended December 31, 2003. The net loss in the December 31, 2004 quarter includes several non-cash items, including a goodwill impairment of $6.0 million, depreciation and amortization of $0.8 million, and an expense for warrants of $0.04 million, as well as an interest expense of $0.4 million. "Strong results from the acquisitions of Redrock and ITI, along with positive growth from existing operations, have enabled DynTek to achieve accelerated revenue growth and meet our previously stated targets," said Steve Ross, DynTek's chairman and chief executive officer. "In addition, operational efficiencies, controlled G&A expenses and improving margins have contributed to our ability to achieve positive EBITDA results for the quarter. We are making significant progress toward our goal of building the premier mid-market professional technology services firm, with non-paralleled solutions in IT security, access infrastructure, and VOIP throughout our core operating regions. The December quarter is traditionally a relatively low-performing quarter, and we continue to affirm our previously announced target of $100 million in revenues with positive EBITDA for calendar 2005." "Additionally, the company recently completed a $7 million equity raise," stated Robert Webber, DynTek's executive vice president and chief financial officer. "We believe that this cash infusion, together with recent integration initiatives and cost reductions in the December quarter, will help DynTek continue to improve operating performance, and allow additional growth through strategic investments in core operations and accretive acquisitions." The Company defines EBITDA as net income (loss) before interest, taxes, depreciation and amortization, goodwill impairment charges, and non-cash expense for securities. 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 GAAP. EBITDA should not be considered in isolation or as superior or as an alternative to net income (loss) or to cash flows from operating activities as determined in accordance with generally accepted accounting procedures. Nonetheless, the Company believes that EBITDA can be a useful supplemental tool for investors and others to measure operating performance, especially in situations where a company has significant non-cash operating expenses. 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 as well as completed and potential acquisitions. About DynTek DynTek is a leading provider of professional technology services to government, education and mid-market commercial customers in the largest IT markets nationwide. The company provides solutions that address the critical business needs of organizations today, such as IT security, voice and data convergence (VOIP), enterprise access and technology management. Our practice areas incorporate an approach and methodology derived from over 18 years of experience in the assessment, design, implementation, management and support of technology solutions. For more information, visit http://www.dyntek.com/. 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, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that certain statements in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors. Such uncertainties and risks include, among others, success in reaching target markets for services and products in a highly competitive market and the ability to attract future customers, the ability to finance and sustain operations, including the ability to comply with the terms of the Textron Factoring Facility and/or other term indebtedness of the Company, and to extend such obligations when they become due, or to replace them with alternative financing, the ability to raise equity capital in the future, despite historical losses from operations, the ability to fulfill the Company's obligations to third parties, and ability to resolve successfully certain ongoing litigation over contract performance in the state of Virginia, the size and timing of additional significant orders and their fulfillment, the ability to turn contract backlog into revenue and net income, the continuing desire of state and local governments to outsource to private contractors, the ability to successfully integrate recent acquisitions, the ability to continue to implement an acquisition growth strategy, the ability to achieve financial targets, the retention of certain key managers, the performance of successful government and commercial technology services, the ability to develop and upgrade our technology, the continuation of general economic and business conditions that are conducive to governmental outsourcing of service performance and the acquisition of other services and product, the ability to maintain its securities on the NASD OTC Bulletin Board or other markets in the future, and such other risks and uncertainties included in our Annual Report on Form 10-K filed on September 29, 2004, our Quarterly Report on Form 10-Q filed on November 15, 2004, and other SEC filings. The Company has no obligation to publicly release the results of any revisions, which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements. DATASOURCE: DynTek, Inc. CONTACT: Linda Ford of DynTek, Inc., +1-949-798-7215, Web site: http://www.dyntek.com/

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