TACX A Consulting Team

The A Consulting Team ('TACT') (Nasdaq SmallCap: TACX), an IT and Business Process Outsourcing (BPO) services provider to Fortune 1000 companies, today reported financial results for its first quarter ended March 31, 2005. The Company reported revenue of $6.1 million, an increase of $314,000 or 5.4 percent over the first quarter of the previous year. The Company reported a net loss of $259,000 or $0.12 per share, which includes pretax charges of $545,000 of costs related to the pending business combination with Vanguard Info-Solutions Corporation ("Vanguard"), which is expected to close shortly. This compares to net earnings of $220,000 or $0.10 per diluted share in the first quarter of 2004. -0- *T $ in 000's Three Months Ended -------------------------- ------------------------------- 3-31-05 3-31-04 -------------------------- --------------- --------------- Revenue $6,115 $5,801 -------------------------- --------------- --------------- Gross profit $1,875 $1,681 -------------------------- --------------- --------------- Net earnings/(loss) $(259) $220 -------------------------- --------------- --------------- Earnings per diluted share $(0.12) $0.10 -------------------------- --------------- --------------- Transaction Costs included in Net loss above $545 $- -------------------------- --------------- --------------- *T Gross margin during the first quarter was 30.7 percent, an increase of approximately 2 percent from the first quarter of 2004 and virtually flat with the previous quarter. On January 23, 2004, the Company announced that it had agreed to combine its business with Vanguard, a private global business process outsourcing, call center and IT services company with operations in the US and India. Pursuant to the terms of the agreement, which includes the issuance of 7.3 million new shares of TACT common stock to Vanguard shareholders, TACT intends to pay a cash dividend of $0.75 per share upon the consummation of the transaction to its shareholders of record as of March 21, 2005. "Excluding the $545,000 in transaction costs incurred during the quarter, TACT would have generated its seventh consecutive quarter of net profitability," commented Shmuel BenTov, TACT's chairman and CEO. "We expect the proposed merger with Vanguard to be completed shortly, which will mark a new era for TACT's shareholders. In addition to a well respected IT services business, our shareholders will also benefit from the fast growing, India based, business processing outsourcing business. Our combined businesses should provide a solid base for strong revenue and earnings growth." Richard Falcone, TACT's chief financial officer, added, "We ended the first quarter with a strong balance sheet. The company's current ratio of 3.02 was virtually flat with the previous quarter level. While accounts receivable increased to $4.5 million from $3.8 million at the end of the previous quarter, our DSO remains very manageable at 59 days. Book value at the end of the quarter was $2.88 per share, and we had no long term debt." TACT intends to conduct a conference call to discuss its first quarter results and its pending business combination with Vanguard when the transaction is completed. About TACT TACT (Nasdaq SmallCap:TACX) is an end-to-end IT and Business Process Outsourcing (BPO) services provider to Fortune 1000 companies, and other large organizations. TACT through its SMART Approach, a leading edge set of end-to-end solutions and services that include Strategy, Methodology, Architecture, Resources and Tools provides its clients with modernization and development services, which include systems that should be replaced and rewritten, enhanced, converted or Web Enabled. More information about TACT(R) can be found at its web site at http://www.tact.com About Vanguard Vanguard was formed in 2000 and is a leading provider of value-added offshore customer care and customer acquisition services, and business process outsourcing ("BPO") solutions in the telecom, medical billing, financial services, debt collection, claims processing, data processing and utility sectors. Vanguard is also a provider of IT consulting and solutions services in the area of telecommunications, web software development, network management and enterprise - wide security. Vanguard has leveraged its global delivery model and process expertise to rapidly become one of the leading off-shore BPO providers and is well-positioned to grow within the BPO services market. Vanguard has facilities in New Jersey, USA and Delhi and Bangalore, India "Safe Harbor" Statements under the Private Securities Litigation Reform Act of 1995: Statements made in this press release which are not historical facts, including those that refer to TACT plans, beliefs and intentions, are "forward-looking statements" that involve risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from the forward-looking statements, and include, but are not limited to, TACT's ability to scale its existing and any new businesses. For a more complete description of the risks that apply to TACT's business, please refer to the Company's filings with the Securities and Exchange Commission. The Company's actual results may differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under Risk Factors and elsewhere in the Company's Annual Report on Form 10-K with the Securities and Exchange Commission on March 25, 2005 -0- *T THE A CONSULTING TEAM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, ----------------------- 2005 2004 ----------- ----------- (unaudited) (unaudited) Revenues $6,115,110 $5,801,072 Cost of revenues 4,240,279 4,119,429 ----------- ----------- Gross profit 1,874,831 1,681,643 Operating expenses: Selling, general & administrative 1,525,999 1,286,803 Transaction expense 545,412 - Depreciation & amortization 60,189 120,274 ----------- ----------- 2,131,601 1,407,077 ----------- ----------- Income (loss) from operations (256,770) 274,566 Other income(expense): Interest expense, net 3,447 (3,736) ----------- ----------- Income (loss) before income taxes (253,323) 270,830 Provision (Benefit) for income taxes 5,921 50,906 ----------- ----------- Net income (loss) $(259,244) $219,924 =========== =========== Net income (loss) earning per share: Basic & Diluted $(0.12) $0.10 =========== =========== *T -0- *T THE A CONSULTING TEAM, INC. CONDENSED CONSOLIDATED BALANCE SHEET March 31, December 31, 2005 2004 ----------- ------------ (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 1,456,593 $ 2,493,104 Accounts receivable 4,467,430 3,810,759 Other current assets 635,536 399,704 ----------- ---------- Total Current Assets 6,559,559 6,703,567 Investment at cost 112,059 87,059 Property and equipment, net 518,379 556,896 Intangibles and Goodwill, net 1,158,297 1,175,631 Deposits and Other 123,363 126,363 ------------- ------------ Total Assets $ 8,471,657 $ 8,649,516 ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $ 2,174,728 $ 2,213,139 Other liabilities 9,876 13,479 ------------- ------------ Total liabilities 2,184,604 2,226,618 Total shareholders' equity 6,287,053 6,422,898 ------------- ------------ Total liabilities and shareholders' equity $ 8,471,657 $ 8,649,516 ============= ============ *T