EXHIBIT NO. 99.1
Contacts: | ||
URS Corporation | Citigate Sard Verbinnen | |
Kent P. Ainsworth | Hugh Burns/Jamie Tully | |
Executive Vice President | (212) 687-8080 | |
& Chief Financial Officer | ||
(415) 774-2700 |
URS CORPORATION REPORTS FIRST QUARTER
RESULTS FOR FISCAL 2005
EPS of $0.45 In Line With Guidance; Outlook for Remainder of 2005 Reaffirmed
Net Income Rises 46% and Company Pays Down $17 Million in Debt, Reducing Debt to Total
Capitalization Ratio to 33%
SAN FRANCISCO, CA – May 10, 2005– URS Corporation (NYSE: URS) today reported its financial results for the first quarter of fiscal 2005, which ended on April 1, 2005. Revenues for the quarter were $922.0 million, compared with revenues of $830.3 million during the comparable period in 2004,1 an increase of 11%. Net income was $20.1 million, an increase of 46% from the $13.8 million reported for the corresponding period in 2004. Earnings per share (“EPS”) of $0.45, fully diluted, was up 15% as compared with EPS of $0.39, fully diluted, for the same period last year.
1 | As previously announced, the Company changed to a calendar fiscal year, effective January 1, 2005. URS now reports its financial results on a 52/53-week fiscal year ending on the Friday closest to December 31, with interim quarters ending on the Fridays closest to March 31, June 30 and September 30. |
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Business Segments
URS Division.For the first quarter of fiscal 2005, the URS Division reported revenues of $608.0 million and operating income of $42.9 million, compared to revenues of $560.5 million and operating income of $39.2 million for the corresponding period in 2004.
EG&G Division.For the first quarter of fiscal 2005, the EG&G Division reported revenues of $315.5 million and operating income of $12.7 million, compared to revenues of $270.1 million and operating income of $10.9 million for the corresponding period in 2004.
Outlook for the Remainder of Fiscal 2005
The Company reaffirmed its expectation that fiscal 2005 revenues will be approximately $3.6 billion. Assuming it meets this revenue expectation, the Company expects that net income will be approximately $96 million and earnings per share will be approximately $2.10 for fiscal 2005. In addition, the Company indicated that second quarter EPS will be between 25% and 29% of the Company’s full year 2005 guidance of $2.10.
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URS Corporation offers a comprehensive range of professional planning and design, systems engineering and technical assistance, program and construction management, and operations and maintenance services for transportation, commercial/industrial, facilities, environmental, water/wastewater, homeland security, installations and logistics, and defense systems. Headquartered in San Francisco, the Company operates in more than 20 countries with approximately 27,800 employees providing engineering and technical services to federal, state and local governmental agencies as well as private clients in the chemical, pharmaceutical, oil and gas, power, manufacturing, mining and forest products industries (www.urscorp.com).
Web cast Information
TABLES TO FOLLOW
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Statements contained in this earning release that are not historical facts may constitute forward-looking statements, including statements relating to the Company’s future revenue and business prospects, future debt repayment and future earning projections. The Company believes that its expectations are reasonable and are based on reasonable assumptions. However, such forward-looking statements by their nature involve risks and uncertainties that could cause actual results to differ materially from the results predicted. The potential risks and uncertainties include, but are not limited to: an economic downturn; changes in the Company’s book of business; the Company’s ability to comply with government contract procurement regulations; the Company’s dependence on government appropriations and procurements; the Company’s ability to profitably execute its contracts and guarantees; the Company’s leveraged position; the Company’s ability to service its debt; liability for pending and future litigation; the impact of changes in laws and regulations; the Company’s ability to maintain adequate insurance coverage; a decline in defense spending; industry competition; the Company’s ability to attract and retain key individuals; risks associated with SFAS 123(R); risks associated with international operations; risks associated with the Company’s accounting and project management software; the Company’s relationship with its labor unions; and other factors discussed more fully in the Company’s Form 10-Q for the first quarter of fiscal 2005, as well as in other reports subsequently filed from time to time with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements.
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URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS — UNAUDITED
(In thousands, except per share data)
April 1, 2005 | December 31, 2004 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents, including $0 and $58,000 of short-term money market funds, respectively | $ | 67,132 | $ | 108,007 | ||||
Accounts receivable, including retainage of $45,672 and $43,844, respectively | 561,990 | 579,953 | ||||||
Costs and accrued earnings in excess of billings on contracts in process | 451,588 | 400,418 | ||||||
Less receivable allowances | (43,317 | ) | (38,719 | ) | ||||
Net accounts receivable | 970,261 | 941,652 | ||||||
Deferred income taxes | 22,725 | 20,614 | ||||||
Prepaid expenses and other assets | 22,328 | 18,863 | ||||||
Total current assets | 1,082,446 | 1,089,136 | ||||||
Property and equipment at cost, net | 142,894 | 142,907 | ||||||
Goodwill | 1,004,680 | 1,004,680 | ||||||
Purchased intangible assets, net | 7,006 | 7,749 | ||||||
Other assets | 51,199 | 52,010 | ||||||
$ | 2,288,225 | $ | 2,296,482 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Book overdraft | $ | 34,122 | $ | 70,871 | ||||
Note payables and current portion of long-term debt | 46,232 | 48,338 | ||||||
Accounts payable and subcontractors payable, including retainage of $14,161 and $13,302, respectively | 164,020 | 138,250 | ||||||
Accrued salaries and wages | 150,657 | 171,004 | ||||||
Accrued expenses and other | 56,818 | 58,901 | ||||||
Billings in excess of costs and accrued earnings on contracts in process | 90,502 | 84,393 | ||||||
Total current liabilities | 542,351 | 571,757 | ||||||
Long-term debt | 493,885 | 508,584 | ||||||
Deferred income taxes | 39,758 | 36,305 | ||||||
Other long-term liabilities | 97,933 | 97,715 | ||||||
Total liabilities | 1,173,927 | 1,214,361 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common shares, par value $.01; authorized 100,000 shares; 43,884 and 43,838 shares issued, respectively; and 43,832 and 43,786 shares outstanding, respectively | 443 | 438 | ||||||
Treasury stock, 52 shares at cost | (287 | ) | (287 | ) | ||||
Additional paid-in capital | 747,592 | 734,843 | ||||||
Accumulated other comprehensive income | 5,752 | 6,418 | ||||||
Retained earnings | 360,798 | 340,709 | ||||||
Total stockholders’ equity | 1,114,298 | 1,082,121 | ||||||
$ | 2,288,225 | $ | 2,296,482 | |||||
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URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME — UNAUDITED
(In thousands, except per share data)
Three Months Ended | ||||||||
April 1, | March 31, | |||||||
2005 | 2005 | |||||||
Revenues | $ | 922,000 | $ | 830,328 | ||||
Direct operating expenses | 588,839 | 521,075 | ||||||
Gross profit | 333,161 | 309,253 | ||||||
Indirect, general and administrative expenses | 288,785 | 267,697 | ||||||
Operating income | 44,376 | 41,556 | ||||||
Interest expense, net | 10,329 | 18,621 | ||||||
Income before income taxes | 34,047 | 22,935 | ||||||
Income tax expense | 13,960 | 9,170 | ||||||
Net income | 20,087 | 13,765 | ||||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments | (666 | ) | 1,016 | |||||
Comprehensive income | $ | 19,421 | $ | 14,781 | ||||
Net income per common share: | ||||||||
Basic | $ | .46 | $ | .40 | ||||
Diluted | $ | .45 | $ | .39 | ||||
Weighted-average shares outstanding: | ||||||||
Basic | 43,731 | 34,392 | ||||||
Diluted | 44,823 | 35,125 | ||||||
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URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED
(In thousands)
Three Months Ended | ||||||||
April 1, | March 31, | |||||||
2005 | 2004 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 20,087 | $ | 13,765 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 9,787 | 11,047 | ||||||
Amortization of financing fees | 1,482 | 1,830 | ||||||
Costs incurred for extinguishment of debt | 762 | — | ||||||
Provision for doubtful accounts | 3,376 | 3,899 | ||||||
Deferred income taxes | 1,342 | (2,226 | ) | |||||
Stock compensation | 1,725 | 660 | ||||||
Tax benefit of stock compensation | 1,522 | 3,570 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable and costs and accrued earnings in excess of billings on contracts in process | (31,985 | ) | 9,384 | |||||
Prepaid expenses and other assets | (3,500 | ) | (2,680 | ) | ||||
Accounts payable, accrued salaries and wages and accrued expenses | 3,338 | (1,041 | ) | |||||
Billings in excess of costs and accrued earnings on contracts in process | 6,109 | (6,676 | ) | |||||
Other long-term liabilities | 251 | 1,063 | ||||||
Other liabilities, net | (756 | ) | 2,801 | |||||
Total adjustments and changes | (6,547 | ) | 21,631 | |||||
Net cash from operating activities | 13,540 | 35,396 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures, less equipment purchased through capital leases | (3,962 | ) | (5,474 | ) | ||||
Net cash from investing activities | (3,962 | ) | (5,474 | ) | ||||
Cash flows from financing activities: | ||||||||
Long-term debt principal payments | (11,067 | ) | (21,858 | ) | ||||
Long-term debt borrowings | — | 346 | ||||||
Net borrowings/(payments) under the line of credit | (6,000 | ) | 17,297 | |||||
Net change in book overdraft | (36,749 | ) | (21,736 | ) | ||||
Capital lease obligation payments | (3,511 | ) | (3,372 | ) | ||||
Short-term note borrowings | — | 1,540 | ||||||
Short-term note payments | (1,614 | ) | (46 | ) | ||||
Proceeds from sale of common stock from employee stock purchase plan and exercise of stock options | 9,508 | 16,609 | ||||||
Call premiums paid for debt extinguishment | (613 | ) | — | |||||
Payments for financing fees | (407 | ) | (3 | ) | ||||
Net cash from financing activities | (50,453 | ) | (11,223 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (40,875 | ) | 18,699 | |||||
Cash and cash equivalents at beginning of period | 108,007 | 34,744 | ||||||
Cash and cash equivalents at end of period | $ | 67,132 | $ | 53,443 | ||||
Supplemental information: | ||||||||
Interest paid | $ | 9,715 | $ | 16,472 | ||||
Taxes paid | $ | 8,782 | $ | 18,235 | ||||
Equipment acquired through capital lease obligations | $ | 5,257 | $ | 4,966 | ||||
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