TACX A Consulting Team

The A Consulting Team, Inc. ("TACT") (Nasdaq Capital Market: 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, 2006. The Company reported revenue of $5.9 million for its first quarter. This compares to $6.1 million for the same period in 2005 and $6.8 million for the previous quarter. The Company reported a net loss for the first quarter of $(139,000) or $(0.06) per share compared to a net loss of $(259,000) or $(0.12) per share during the first quarter of 2005, which included approximately $545,000 of costs associated with a terminated business combination. This also compares to net earnings of $203,000 or $0.09 per share for the fourth quarter last year. -0- *T (In 000s except per share amounts) Three Months Ended ---------------------------------------------------------------------- 3-31-06 12-31-05 3-31-05 ---------------------------------------------------------------------- Revenue $ 5,911 $ 6,755 $ 6,115 ---------------------------------------------------------------------- Gross Profit $ 1,612 $ 2,243 $ 1,875 ---------------------------------------------------------------------- Income/(Loss) from Operations $ (140) $ 206 $ (257) ---------------------------------------------------------------------- Net Income/(Loss) $ (139) $ 203 $ (259) ---------------------------------------------------------------------- EPS per share $ (0.06) $ 0.09 $ (0.12) ---------------------------------------------------------------------- *T For the first quarter 2006 the Company's gross profit margin of 27.3 percent was down from the prior year first quarter of 30.7 percent and the fourth quarter of 2005 of 33.2 percent. The decrease in gross margin was attributable to a change in the mix of time and material work to fixed priced projects due to the completion of two major fixed price contracts at the end of 2005 and the increased salary costs of consultants, which the Company was not able to pass along to its clients. Selling, general and administrative (SG&A) costs were $1.7 million during the current year first quarter. This compares to $1.5 million (excluding the costs associated with the terminated business combination) during the same period of the previous year and $2.0 million in the previous quarter. The increase in SG&A expenses in the current quarter primarily reflects the costs of sales and marketing professionals added during the quarter to augment the Company's marketing efforts. "The first quarter proved to be a challenge as we sought to replace a number of projects that were completed towards the end of 2005. With additional marketing and sales professionals solidly in place, we expect to regain revenue growth and continue to build TACT's balance sheet," commented Shmuel BenTov. "Our expertise in business-focused technology cultivates an efficient process towards our clients' objectives, while the company's off-shore operation heightens our ability to aggressively pursue business through competitive pricing, further enhancing our value-added proposition to our clients." Mr. Quadrino added, "TACT's financial position remains strong with $1.8 million in cash and cash equivalents, a current ratio of 2.7 and no long-term debt." TACT has scheduled a conference call to present its first quarter financial results today, Monday, May 15, 2006, at 11:00 am (EST). Interested parties may access the conference call by dialing 800-670-3543 and providing the following reservation number: 21291849. The call will be available via the Internet through CCBN at www.fulldisclosure.com. A replay of the conference call in its entirety will be available for 24 hours approximately two hours after its completion by dialing 800-633-8284 and entering the confirmation number listed above and through CCNB. About TACT TACT (Nasdaq Capital Market: TACX) has built a reputation for cutting-edge IT Solutions that is exemplified by its impressive roster of Fortune 1000 customers. TACT focuses on a business-oriented, value-added approach to its end-to-end IT Services and Business Process Outsourcing solutions. For over 20 years, TACT has provided complete project life-cycle services in the areas of Business Intelligence, Custom Application Development, Strategic Sourcing, Support and Maintenance, Data Supply Chain, Collaboration, Quality Assurance, Project Portfolio Management, and other specific vertical solutions. TACT has offices in New York City, Clark, New Jersey, and Bangalore, India. More information about TACT(R) can be found at its web site at http://www.tact.com. "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 29, 2006. -0- *T THE A CONSULTING TEAM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, ----------------------------- 2006 2005 ------------ ------------ (unaudited) (unaudited) Revenues $ 5,910,653 $ 6,115,110 Cost of revenues 4,298,776 4,240,279 ------------ ------------ Gross profit 1,611,877 1,874,831 Operating expenses: Selling, general & administrative 1,715,545 2,071,411 Depreciation & amortization 36,684 60,189 ------------ ------------ 1,752,229 2,131,601 ------------ ------------ Loss from operations (140,352) (256,770) Other income(expense): Interest income-net 5,784 3,447 ------------ ------------ 5,784 3,447 ------------ ------------ Loss before income taxes (134,568) (253,323) Provision for income taxes 4,700 5,921 ------------ ------------ Net loss (139,268) (259,244) Other comprehensive loss - foreign currency adjustment (2,165) - ------------ ------------ Comprehensive loss $ (141,433) $ (259,244) ============ ============ Net loss per share Basic and diluted $ (0.06) $ (0.12) ============ ============ THE A CONSULTING TEAM, INC. CONDENSED CONSOLIDATED BALANCE SHEET March 31, December 31, 2006 2005 ----------------------------- (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 1,787,417 $ 2,156,867 Accounts receivable 4,156,601 3,918,371 Other current assets 839,630 594,977 ------------ ------------ Total Current Assets 6,783,648 6,670,214 Investments, net 87,059 87,059 Property and equipment, net 481,521 480,845 Goodwill 1,140,964 1,140,964 Other assets 111,561 114,363 ------------- ------------- Total Assets $ 8,604,753 $ 8,493,444 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $ 2,480,491 $ 2,288,648 Total shareholders' equity 6,124,262 6,204,797 ------------- ------------- Total liabilities and shareholders' equity $ 8,604,753 $ 8,493,444 ============= ============= *T