Bob Scott reporting in his weekly Insights column.
Edgewater Technology, which owns Dynamics Fullscope, saw a sharp drop in earnings for the second quarter ended June 30 as customers postponed the start of projects. Edgewater reported net income of $494,000 for the most recently ended period, down 72.3 percent from $1.7 million The bottom line suffered with gross profit dropping to 34.1 percent from 37.3 percent a year ago while operating expenses rose to slightly more than $9 million, an increase of 17 percent from $7.7 million in last year’s corresponding period. Meanwhile, revenue grew to $30.6 million, up 4.5 percent from a year earlier. Delays hurt the margins since Edgewater had staffed up for projects. CEO Shirley Singleton said several of these involved EPM customers that had increased the scope of the deals, but that moved revenue out of the second quarter. Singleton also talked about expanding the company’s channel operations nationally. “We will seek to expand our North American geographic foothold,” Singleton said. That includes possible acquisitions. Meanwhile, she also said the company would increase channel marketing describing as an area where “We have been lax.” Contributing to the increase in costs was Edgewater’s acquisition of Zero2Ten, a top Microsoft Dynamics CRM reseller, in the first quarter. That pushed up compensation and employee expense costs.