Rent-to-own News - Vance Baldwin acquisition boosts record revenue

Encompass Group Affiliates, Inc. (formerly Advanced Communications Technologies, Inc.), an integrated reverse logistics holding company serving the consumer products industry, today announced financial results for the third fiscal quarter and the nine months ended March 31, 2008.

For the three and nine month periods ended March 31, 2008, the Company reported record revenue of $19.5 million and $45.1 million, respectively, compared to $2.6 million and $6.8 million, respectively, for the comparable periods. The increases in revenue are principally attributable to the acquisition of Vance Baldwin Electronics, which was completed on August 17, 2007.

On a pro forma basis, assuming Vance Baldwin had been included in consolidated results in full for all periods, revenue for the current quarter would have increased by 17.9% from $16.5 million for the three months ended March 31, 2007. Also on a pro forma basis, revenue for the nine months ended March 31, 2008 would have amounted to $51.5 million, compared to $44.9 million for the nine months ended March 31, 2007, an increase of 14.7%.

For the quarters ended March 31, 2008 and 2007, net income (loss) amounted to $363,000 and $(344,000), respectively, on a GAAP (generally accepted accounting principles) basis. For such periods, non-GAAP adjusted net income (loss) amounted to $676,000 and $(331,000), respectively.

For the nine month periods ended March 31, 2008 and 2007, net losses amounted to $(436,000) and $(640,000), respectively, on a GAAP basis. For such periods, adjusted net income (loss) amounted to $1.1 million and $(609,000), respectively,

Adjusted EBITDA amounted to $1.6 million and $(294,000) for the quarters ended March 31, 2008 and 2007, respectively, and $3.3 million and $(507,000) for the nine month periods ended March 31, 2008 and 2007, respectively.

“I am pleased to report that the three months ended March 31, 2008 represents the first profitable quarter in the Company’s history when certain non-operating, financial gains are excluded from past results. This marks a significant achievement and reflects strong performances by both Vance Baldwin and Cyber-Test in terms of revenue, profitability and combined operating efficiencies,” said Wayne Danson, President and Chief Executive Officer of Encompass. “While the double digit growth rate being experienced by these units is significant, we nonetheless continue to pursue all avenues to further maximize revenue and profitability, including acquisitions.”

Danson noted that, besides the record January results and the strong quarter, the Company has achieved other objectives since the prior quarter end. “We are excited that our stockholders approved the change of our name to Encompass Group Affiliates, Inc. from Advanced Communications Technologies, Inc., which we feel is an important step in our efforts to better integrate and brand the Company’s business operations. A sound branding program will become even more important as we continue to expand our service offerings through the acquisition of other businesses.”

“Ongoing operations had a record month in January and are currently generating sales at over a 30% higher level than a year ago. The addition of new customers and programs as well as increased business from established customers are fueling the sales increases. We have made significant progress toward our targeted growth rates for each of our operating units,” said Steve Miller, Chief Operating Officer of Encompass.

About Encompass Group Affiliates, Inc.

Encompass Group Affiliates, Inc. (OTC Bulletin Board: ADVC), is a New York-based company that specializes in the consumer electronic aftermarket service and supply chain, known as reverse logistics. Encompass Group Affiliates acquires businesses that provide computer and electronic repair services, parts distribution and asset management services. Encompass Group Affiliates addresses the full scope of this multi-billion market – including the end-user driven product support and repair industry, as well as the manufacturer-driven recovery and e-Waste industry. It provides single-source lifecycle management services for technology products, currently in the North American market, with accelerating growth towards a global presence. The Company’s market position is based on its distinctive ability to provide single-point, comprehensive lifecycle service on a competitive basis. For more information about Encompass Group Affiliates, Inc visit our website at http://www.encompassgroup.com.

About Vance Baldwin Electronics

Vance Baldwin Electronics, an Encompass Group Affiliates company, is an industry leading Original Equipment Manufacturer Parts Distributor. In continuous operation for more than fifty years and operating from south Florida, Vance Baldwin distributes more than 150 brands annually for consumer electronics, computers, printers and office equipment. Vance Baldwin also provides service aids and industrial products such as cable, tools, test equipment, cleaners and other installation equipment. Its distribution facility located near Atlanta, Georgia, allows for 2 day delivery to the vast majority of the United States with UPS Ground Service. It maintains a call center with highly trained parts consultants to receive customer calls and provide assistance with parts selection and ordering. For more information about Vance Baldwin Electronics, visit www.vancebaldwin.com

About Cyber-Test

Cyber-Test, an Encompass Group Affiliates company, is an established electronic equipment repair facility located in Orlando, Florida. The company specializes in the repair and exchange of consumer and office electronic equipment, providing board-level and whole-unit repair to third-party warranty companies, OEMs, national retailers and national office equipment dealers. Cyber-Test, in continuous operation since 1986, offers Level II and Level III call center technical support, service contract administration and support and asset recovery programs. The company’s expertise is rooted in depot repairs, advance exchange services, reverse engineering logistics, and help desk technical support. For more information, visit Cyber-Test’s website at http://www.equipfix.com.
 

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