Friday, February 10, 2012

Beacon Enterprise Solutions Group, Inc. (BEAC) Addresses Investors in Q1 2012 Conference Call

Beacon’s formal announcement of its first quarter 2012 results in yesterday’s teleconference confirmed the positive anticipations that had ended the company’s December call giving end-of-year results. The management team was able to announce that they had accomplished what they had set out to accomplish and more. Net sales for the quarter were up 51% from the same quarter last year, with gross profit up 97%. Margins improved 900 basis points, from 30% to 39% from the same quarter last year, and total operating expenses decreased 12%. Perhaps most significantly was income from operations for the quarter, which was again in positive territory, growing this time to $71,000, with EBITDA a positive $183,000.

Chairman and CEO, Bruce Widener, emphasized the significance of such positive net results, pointing out that there are still challenges in the global economy, with some large infrastructure projects delayed and longer than usual sales cycles. He concluded that Beacon is on track to achieve a minimum of 50% annual sales growth in 2012, not counting pending large infrastructure projects. The company expects to achieve sustainable profitability, with a sales pipeline that continues to expand.

Pertinent to this was the incorporated announcement that Paris G. Arey, a respected international sales and marketing veteran for both startup and Fortune 500 companies, will be joining Beacon as Executive VP, Sales and Marketing. With over 30 years of experience, including executive positions at Cisco where he built and managed several multi-billion businesses, it represents a major investment in talent, reflecting Beacon’s stated principle that people are considered the company’s most important asset.

In the Q&A portion of the earnings teleconference, a question was raised about why specific backlog numbers were not yet available. It was explained that Beacon, in its transition to a cloud-based ERP and CRM system for more accurate tracking of sales, was moving away from the previously used backlog calculation as a metric. The new method combines two metrics, the first being existing purchase orders and contracts, and the second being anticipated projects and clients. Although the pipeline has grown, Beacon is still involved in implementing this new process and numbers are forthcoming.

Another question was directed at the difference in operating profit between North American and European operations, which was explained by the fact that the key administrative expenses are attached to North America. In addition, since Beacon’s client market is more mature in North America, revenue is understandably at a different part of the business cycle than elsewhere as existing projects are resolved. New clients will again bolster revenue in North America.

For additional information, visit the company’s website at www.AskBeacon.com

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