FFI Reports 3Q Earnings

                               

INDIANAPOLIS, May 17 /PRNewswire-FirstCall/ -- Fortune Industries, Inc. (the "Company") announced today third quarter earnings of $(0.01) per diluted share for the three months ended March 31, 2010.

Highlights

Net income available to common stock shareholders for the three months ended March 31, 2010 was $(0.176) million or $(0.01) per share fully diluted versus earnings of $0.101 million or $0.01 per share fully diluted for the same three-month period in 2009, representing a decrease in net income available to common stock shareholders of $(0.277) million or $(0.02) per share fully diluted.  

Net income available to common stock shareholders for the nine months ended March 31, 2010 was $0.670 million or $0.05 per share fully diluted versus pro forma earnings of $(4.671) million or $(0.39) per share fully diluted for the same nine-month period in 2009, representing an increase in net income available to common stock shareholders of $5.34 million or $0.44 per share fully diluted.  

"This quarter was difficult due to some unexpected workers' compensation claims, which directly affected our bottom line," stated Tena Mayberry, CEO.  "A material portion of our business is managing risk, and while we have a proven track record in our ability to manage our workers' compensation programs profitably over the long term, an isolated quarter may have claims that exceed premiums.  This quarter we saw several new claims occur and negative development of existing claims in a very short period which created a loss.  However, we also had claims with positive development this quarter which we expect to have a positive impact in future quarters."

"Further, we have successfully renegotiated one of our largest workers' compensation insurance policies, which will significantly increase our working capital in Q4 and throughout fiscal year 2011 by the release of collateral that was previously classified as restricted cash."  

"In January, we experienced a decrease in revenue, as our existing clients continued to downsize through layoffs and our overall worksite employee counts significantly decreased.  However, in February our worksite employee counts began to trend up, and that positive trend has continued and gained momentum all the way through March.  Field indicators predict that this trend will continue in the fourth quarter."

"Despite an economy that continues to recover, we have had significant improvement during this nine-month period versus the same nine-month period last year.  All things considered, we are pleased with our performance year-to-date.  We are adapting our service model to create new revenue growth opportunities, especially in technology-based online training and assessments, which we anticipate will have a positive impact in the fourth quarter and continuing through the fiscal year 2011.  At the same time, we continue to implement and evaluate cost-reduction programs across all areas of the Company to improve overall efficiency."

The Company reported EBITDA of $0.165 million for the three months ended March 31, 2010, as compared to EBITDA of $0.718 million for the same three-month period in 2009, representing a $0.553 million decrease in EBITDA for the current period.

The Company reported EBITDA of $1.416 million for the nine months ended March 31, 2010, as compared to pro forma EBITDA of $(0.965) million for the same nine-month period in 2009, representing a $2.381 million increase EBITDA for the current period.

Revenue for the three months ended March 31, 2010 was $15.3 million as compared to revenue of $15.4 million for the same three-month period in 2009, representing a $0.1 million decrease in revenue for the current period. 

Revenue for the nine months ended March 31, 2010 was $45.1 million as compared to pro forma revenue of $49.1 million for the same nine-month period in 2008/2009, representing a $4.0 million decrease in revenue for the current period.  

About Fortune Industries, Inc.

Fortune Industries, Inc. is a professional employer organization (PEO) to small and medium-sized businesses in 47 states, providing human resource management & consulting, training & compliance, risk management, and benefits administration.