Beacon Enterprise Solutions Group, Inc. (OTCBB: BEAC) is a provider of technology systems professional services to large national, multi-national and global firms.
The Company’s fiscal reporting period ended September 30, 2011 and was marked by improved sales, improved earnings and marked operational efficiencies. The improved sales include a growing number of new clients and expanded engagements with existing customers emanating from the Company’s ability to nimbly and effectively provide technology system solutions to the needs of clients are demonstrated in the October 26, 2011.
Beacon’s approach to providing comprehensive Information Technology Systems (ITS) managed services and a strategic offering of consulting and planning-related professional services, allows Beacon to tailor our services to provide scalable solutions for national, multi-national and global enterprise clients. Beacon offers creative solutions to working within the client’s sourcing workflow and operational requirements to provide staff augmentation and professional services in support of work tickets, site assessments and documentation, design, installation and Day 2 management. Because of this, Beacon’s value proposition is strong and well received during any period of change in business climate, including both growth and decline.
Beacon’s Scalability Produces Truly Global Solutions
No aspect of the delivery of technology solutions has kept pace with the evolution of Fortune 1000 enterprises as they have evolved from a regional mindset and management structure to a truly global focus. As a solutions-based business, Beacon was the first ITS infrastructure firm to make the corporate investment in a truly global business model that would address the needs of the new national, multi-national and global enterprises. Prior to Beacon, service delivery of technology system services was at best a national effort, and at worst a patchwork quilt of companies stitched together – resulting in very high internal management costs to the newly global enterprise managers. Beacon’s portfolio of technology system infrastructure services span all professional and construction service requirements for the built environment, but more importantly Beacon offers those services where they are most needed – everywhere.
Solutions-based professional services include a comprehensive suite of global offerings:
- Site survey and documentation
- Consulting and planning
- Design and engineering
- Project and Program Management (PMO)
- Managed Services (Infrastructure)
Beacon Provides a Competitive Advantage
The world has changed. Consolidation, cost-cutting, right-sizing and even M&A activity driven by efficiency is now the model for business. Staff augmentation and outsourcing of suppliers and support functions is now commonplace, thanks to geopolitical, economic and technology changes. For large national, multi-national and global firms based in the US, the ability to drive integration and standardization across geographic, cultural and language barriers are a key challenge. Beacon offers the solution by bridging the gap between corporate and local day-to-day management resources to enable the client to focus limited resources on core responsibilities and not sacrifice the baseline standardization, quality and efficiency that have become competitive parity. Contrary to most service businesses which tend to be regional or project focused, Beacon establishes density of resources and skills in response to client requirements and shifts due to consolidation, acquisition or organic growth.
Beacon’s competitive advantage includes;
- More agile and efficient management of technology infrastructure
- A partner with proven global reach with depth of skills and experience
- Consistent and predictable results
- Reduce costs through standardized service delivery
- Permits closer integration of services delivery into procurement strategy
- Fewer points of failure in planning, design and construction
- Single source for technology projects, rollouts and management – reducing internal cost of technology
- Public company provides regulatory consistency and reduced risk to public clients
Fortune 1000 Focus
Beacon focuses on US-based Fortune 1000 companies who use English as their language of business, and because of acquisition, organic growth, down-sizing, consolidation or operational focus need to outsource, augment staff, standardize or increase control over some or all of their technology system services. In addition, Beacon has expanded into the federal and government markets in order to diversify its client base, timing of budgets and technology spend. In response to the identification of a significant un-served market, the business strategy is fully focused on being the leading provider of national, multi-national and global telecommunications and technology systems infrastructure professional services, encompassing a comprehensive suite of consulting, design, project and program management, construction management and infrastructure managed services offerings.
Beacon has shown strong performance in the following verticals;
Pharmaceuticals
Beacon has existing relationships with 4 of the top 15 pharmaceuticals and enjoys most-favored-nation (preferred) status with 2 of them. Pharmaceutical clients have wide geographical diversity with strong consolidation and acquisition activity. In addition to the requirement for Beacon’s core services, clients like the pharmaceuticals who acquire to achieve diversity have a high number of international campuses and sites that drive the need for US-based headquarters to partner with a company who can mobilize globally for day-to-day management, major projects and global rollouts.
Retail
Beacon has existing relationships with 4 of the largest retail companies and enjoys most-favored-nation (preferred) status with 2 of them. Like pharmaceuticals, retail companies have many locations and because of global expansion have insufficient internal resources to integrate, manage and grow their technology infrastructure. In addition to the requirement for Beacon’s core services, retail firms require the cost-reduction benefits of standardization and reduction of internal cost more than almost any other client. Any relationship that drives efficiency reduces the price at the cash register or the online shopping cart.
Global IT Service Providers/Systems Integrators
Beacon has existing relationships with 3 of the top global IT service providers and systems integrators, and has active projects or agreements in place with 2 of them. These global IT firms typically sign large national, multi-national or global agreements and then struggle to deliver services in Beacon’s core practice, which represents less than 5% of the typical IT services agreement that often reach several hundred million dollars in value. By partnering with the global IT services firms, Beacon can reduce its cost-of-sale by leveraging existing Fortune 1000 relationships held my these mega firms offering global IT services.
Fed/Gov Contractors and Integrators
Beacon focuses on partnering with federal and government contractors who have annual revenue of under $1 billion. These firms, especially those who are Small Business Administration certified 8-a and certified Disadvantaged Business Enterprise and Minority Business Enterprise firms provide a nimble entry into existing clients and contract vehicles without a protracted sales cycle. Beacon currently has a number of multi-million dollar projects in progress with federal contractors and active relationships with more. These relationships include a unique partnership where Beacon has a signed agreement to manage and grow the telecommunications division of a $60M federal contractor based in Washington, DC.
BEAC Anticipated Growth Q4
In a recent press release, the Company stated for the period ending on September 30, 2011, that it anticipates the announcement of strong growth.
- Fiscal 2011 net sales anticipated to increase more than 30% over fiscal 2010 net sales, which were $14 million.
- Gross profit margin for the fourth quarter is expected to range between 35% – 40%
- SG&A expenses are expected to reflect continued significant reductions in comparison with fiscal 2010.
Recent Contracts Total Over $10 Million
Recent contract awards are indicative of an enhanced services approach to major clients and projects. Since June 2011, Beacon has announced contact awards with multiple Fortune 1000 clients totaling over $10 million.
On June 23, Beacon announced two different contracts totaling $1.2 million. The first contract for $900,000 was for an existing Fortune 500 pharmaceutical firm to provide professional services to assess and document over 30 sites throughout the world. The second contract announced the same day was for a national grocery chain to implement a prototype ITS solution in approximately 100 stores that has the capacity to grow throughout the over 2,000 stores nationwide.
On August 16, Beacon announced a $4 million contract with ICS, a prime contractor for the Washington Mass Transit Authority Red Metro line to provide various professional services ITS infrastructure services for the client. As well, another contract was executed with the same federal contractor totaling $3.4 million to implement a wireless tracking solution.
On September 14, 2011, Beacon announced a $500,000 project to provide fiber-optic cabling for a long-term client in one of its US locations. Completion is expected before the end of the calendar year. On October 5, an additional contract engagement was signed with the same client worth an estimated $1,330,000, totaling $1,830,000 in newly signed ITS infrastructure business.
Beacon Advantages – Based upon Managerial Experience
Beacon’s strong management team and their focus on long term value creation is crucial to developing new services, successfully adapt to market shifts and to keep staff motivated. This is sometimes regarded as the strongest analysis of a profitable company as good management often means strong companies and strong companies means better investments.
The following factors are indications of good management and have been part of the progress made by the management team over the last few quarters;
- Margin improvement trend
- Management is focusing on long-term value creation
- Able to improve sustainable competitive advantages
- Elimination and discontinuation of low margin lines of business
- Strong risk management stabilizing margin and revenue
- Strong financial controls and compliance programs
- Impartial financial overviews of the company results
- Management has been in the industry for 20 years or more indicating they know the business
- Management has started the company themselves
Fourth Quarter Conference Call
Beacon expects to issue its financial results for the fourth quarter and fiscal year-end on Monday, December 12, 2011.
Beacon Enterprise Solutions will host a conference call to discuss its fourth quarter and fiscal year-end financial results on Tuesday, December 13, 2011, at 10:00 a.m. EST.
- The teleconference can be accessed by calling 888-495-3916 and entering conference ID # 20119461.
- Participants outside of the U.S. and Canada can join by calling 706-634-7530 and entering the same conference ID.
The conference call will be simultaneously webcast and available on the company’s website:
The call will be located under the “Investor Relations” tab. A digital recording of the conference call will be available for replay two hours after the end of the call’s completion until 11:59 p.m. EST on Thursday, December 15, 2011 by calling 404-537-3406 and entering conference ID # 20119461.
Executive Management
Bruce Widener
Founder, Chairman and Chief Executive Officer of Beacon
Mr. Widener brings over 24 years of experience in various executive management positions in the telecommunications and information technology industry. Prior to forming Beacon in late 2007 after a successful RTO and the merger of four seasoned information technology companies, Mr. Widener was one of the founding executives of UniDial Communications / Lightyear Network Solutions, a private company that grew from start-up to over $220,000,000 in sales within six years.
Jerry Bowman, RCDD, NTS, RTPM(i), CISSP, CPP, CSI
President and COO
With over 25 years of industry experience, Mr. Bowman was the former Managing Director and VP for CommScope, a $4 billion manufacturer of connectivity solutions for commercial networks. His currently the President-Elect of BICSI and has served on the Board of Directors there for 6 years. Additionally, Mr. Bowman has served as a board member for industry associations and workgroups, is an author of a number of industry standards and best practices, and has been a featured speaker and thought leader for organizations such as ASIS, ISC, ISA, BICSI, ISSA, and InfraGard.
Victor Agruso
Chief Administrative Officer
Chief Human Resource Officer for the past three years, Mr. Arguso has recently taken on the additional role of oversight of Finance & Accounting and Legal. Victor Agruso has more than 20 years of corporate leadership and international experience with companies such as Nike and Hallmark Cards, with focus on strategic planning and organizational development.
Scott Fitzpatrick
Corporate Controller and PFO
Vice President Corporate Controller and Treasurer, and is Beacon’s Principal Financial Officer. Mr. Fitzpatrick has more than 25 years of accounting/finance experience with growth-oriented public companies, including serving as Corporate Controller and Director/Manager for multi-location companies in both service and manufacturing industries. His experience encompasses International Accounting, SEC and Internal Financial Reporting, GAAP Compliance, Financial Analysis, Budgeting, and many other financial and operational areas.
Greg Guilford
VP Financial Planning and Reporting
Vice President Financial Planning & Reporting from Director of Financial Reporting. Mr. Guilford, has more than 20 years of financial, management and operational experience, and will continue to oversee all internal and external financial reporting activities.
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Beacon Enterprise Solutions Group, Inc.
Bruce Widener, CEO
502-657-3507
investors@askbeacon.com
Porter, LeVay & Rose, Inc.
212-564-4700
Marlon Nurse, V.P.
Investor Relations
Beacon Enterprise Solutions Group, Inc.
9300 Shelbyville Road
Suite 1000
Louisville, KY 40222
Website: http://www.askbeacon.com
Phone: 502-657-3500
Email: investors@askbeacon.com
This release may contain “forward-looking statements.” Expressions of future goals and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements may include, without limitation, statements about our market opportunity, strategies, competition, expected activities and expenditures as we pursue our business plan. Although the Company believes that the expectations reflected in any forward looking statements are reasonable, it cannot predict the effect that market conditions, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and factors described in our filings with the Securities and Exchange Commission may have on our results. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release. BEAC Disclosure: Pentony Enterprises LLC entered into an investor relations consulting and market awareness contract with a third party investor relations company for coverage of Beacon Enterprise Solutions Group, Inc. (OTCBB: BEAC). We hold not shares and will not be receiving any shares. To avoid all potential conflicts of interest, we never sell shares into the open market during an active market awareness or investor relations program. This means that as we release new information about a particular client company either on our site or otherwise authored by us, you can be confident we are not selling shares at the same time. Pentony Enterprises is not a registered investment adviser or a broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person, or that an investment in such securities will be profitable. We expect to be compensated up to ten thousand dollars for coverage. . In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk. Pentony Enterprises LLC – 1601 Berwick Drive – McKinney, Texas 75070 – (469) 252-3031.
