Exhibit 99.3
NEWS RELEASE for August 7, 2002 at 7:30 AM EDT
Contact information:
The Keith Companies, Inc. 2955 Red Hill Ave. Costa Mesa, CA 92626 (714) 668-7001 (714) 668-7026 Fax www.keithco.com Contact: Aram Keith, CEO & Chairman of the Board | Allen & Caron, Inc Lynn Montoya (Investors), or Lynn@allencaron.com Matt Clawson Matt@allencaron.com (949) 474-4300 |
THE KEITH COMPANIES REPORTS RECORD SECOND QUARTER 2002 RESULTS
WITH NET REVENUE AND NET INCOME REACHING AN ALL-TIME HIGH
• | 36% increase in net revenue for the quarter ended June 30, 2002 | ||
• | 18% increase in net income for the quarter ended June 30, 2002 |
COSTA MESA, CA (August 7, 2002) ... The Keith Companies, Inc. (Nasdaq: TKCI), an engineering and consulting services firm, today announced that net revenue for the second quarter ended June 30, 2002 reached record levels, increasing to $24.1 million, up 36 percent from last year’s second quarter net revenue of $17.7 million.
The overall increase in net revenue during the 2002 second quarter was due to additional net revenue generated from acquisitions. Net income for the second quarter of this year increased 18 percent to $1.9 million, or earnings per diluted share of $0.24 (based upon 7.9 million diluted weighted average shares outstanding), as compared to net income of $1.6 million, or earnings per diluted share of $0.23 (based upon 7.0 million diluted weighted average shares outstanding) during last year’s second quarter. The increase in diluted weighted average shares outstanding is predominately due to the Company’s Secondary Offering in May 2001.
Chairman and CEO Aram Keith commented, “I am very pleased with our mix of business lines. Our diversification strategy, which our acquisition activity has noticeably enhanced, continues to be implemented. Each business line has had the opportunity to make noticeable contributions to our success.
“Looking ahead, I am especially excited about the health of the real estate housing sector. As unprecedented demand continues to build in the U.S. and especially the Sunbelt, both for single family housing and for planned retirement communities, our real estate divisions continue to experience opportunities to enhance our operations in this sector with active developers and builders. Our strong presence in this market is what has set us apart from many of our competitors in the engineering services sector and has helped contribute to making our profit margin one of the highest in our industry,” Keith said.
Net revenue for the six months ended June 30, 2002 was $45.5 million, an increase of 32 percent from $34.3 million for the six months ended June 30, 2001. This increase was due to additional net revenue generated from acquisitions. Net income for the six months ended June 30, 2002 increased 12 percent to $3.3 million, or earnings per diluted share of $0.42
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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(based upon 7.8 million diluted weighted average shares outstanding) compared to $3.0 million or earnings per diluted share of $0.46 (based upon 6.4 million diluted weighted average shares outstanding) for the six months ended June 30, 2001. The increase in diluted weighted average shares outstanding is predominately due to the Company’s Secondary Offering in May 2001.
Keith added, “Continued effort with our strategy of cross-selling has yielded benefits. The added awareness of our divisions about the expertise and services that other divisions provide has led to successfully winning larger portions of several contracts than would have been pursued prior to this strategy.”
The Company’s June 30, 2002 balance sheet remains strong with cash and securities of $19.2 million, a current ratio of 2.95:1, a debt to equity ratio of 0.03:1 and shareholders’ equity of $57.2 million or $7.80 per share outstanding.
Net Revenue Contributions From Acquisitions
Acquired companies (ALNM Group, Inc., acquired March 2002; Pacific Engineering Corporation, acquired September 2001; and Universal Energy, Inc., acquired November 2001) contributed $6.4 million in net revenue for the three months ended June 30, 2002 as compared to the corresponding prior year period.
For the six months ended June 30, 2002, acquired companies contributed $11.6 million in net revenue compared to the six months ended June 30, 2001. This $11.6 million includes one month of revenue contributed by Hook & Associates Engineering, Inc. (acquired January 2001), four months of revenue contributed by ALNM Group, Inc., and a six-month revenue contribution from both Pacific Engineering Corporation and Universal Energy, Inc.
Financial Guidance
The Keith Companies’ financial guidance for diluted earnings per share for the third and fourth quarters of 2002 remains unchanged from the guidance previously provided. The Company estimates net revenue for 2002 to range from $91.0 million to $96.0 million with estimated diluted earnings per share ranging from $0.90 to $0.97 ($0.25 to $0.29 for the third quarter and $0.22 to $0.26 for the fourth quarter) based upon an estimated 8.0 million weighted average number of diluted shares outstanding for the year.
Conference call to be broadcast live over the Internet
The Company will be hosting an earnings conference call, which will be broadcast live over the Internet at 8:30 a.m. Pacific Time on August 7, 2002 and can be accessed by all interested parties at www.viavid.com. To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call for approximately seven days.
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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About The Keith Companies
The Keith Companies, Inc. is a fully integrated, multi-disciplined engineering and consulting services company, with offices located throughout the Western and Midwestern United States. The Keith Companies’ professionals provide a wide spectrum of skilled resources including land planning, engineering, surveying, mapping, environmental, and water and cultural resources, that are needed to effectively plan, engineer, and design state-of-the-art facilities. Additionally, the Company provides mechanical, electrical, chemical, power/energy engineering, and other industrial engineering services to design and improve the efficiency and reliability of automated and manufacturing processes, production lines, and fire protection systems. The Keith Companies benefits from a diverse public and private client base varying from residential and commercial real estate projects to institutional, manufacturing, and processing facilities. For more information visit the Company’s website at www.keithco.com.
Certain statements in this news release may include forward-looking statements that express our expectation, prediction, belief, or projection. These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, and achievement of The Keith Companies to be materially and adversely different from any future results, performance, or achievement expressed or implied by these forward-looking statements. Factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the Company’s prospects in general include, but are not limited to: changes in the rate of economic growth in the United States and other major international economies, our ability to sustain our growth and profitability, our ability to implement our acquisition strategy and to successfully close and integrate acquired companies on a timely and cost-effective basis, our ability to successfully maintain our cross-selling strategy, outcomes of pending and future litigation, the ongoing financing of public works and infrastructure enhancements and refurbishment, our ability to attract and retain employees, the demand for electricity and the impact on power providers’ plans for expanding generation facilities, increasing competition by foreign and domestic companies, a downturn in the real estate market, our failure to accurately estimate costs on fixed-price contracts or contracts with not-to-exceed provisions, the uncertain timing of awards and contracts, the ability to maintain acquired companies’ profit margins and/or client base, the short- and long-term impact of terrorist activities and resulting political and military policies, and other factors as are described in the Company’s filings with the Securities and Exchange Commission.
TABLES FOLLOW
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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The Keith Companies, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2002 | 2001 | 2002 | 2001 | ||||||||||||||
Gross revenue | $ | 28,927,000 | $ | 19,239,000 | $ | 54,831,000 | $ | 37,941,000 | |||||||||
Subcontractor costs | 4,869,000 | 1,522,000 | 9,378,000 | 3,602,000 | |||||||||||||
Net revenue | 24,058,000 | 17,717,000 | 45,453,000 | 34,339,000 | |||||||||||||
Costs of revenue | 16,055,000 | 11,356,000 | 30,350,000 | 22,253,000 | |||||||||||||
Gross profit | 8,003,000 | 6,361,000 | 15,103,000 | 12,086,000 | |||||||||||||
Selling, general and administrative expenses | 4,969,000 | 3,777,000 | 9,774,000 | 7,061,000 | |||||||||||||
Income from operations | 3,034,000 | 2,584,000 | 5,329,000 | 5,025,000 | |||||||||||||
Interest income | 93,000 | 151,000 | 217,000 | 151,000 | |||||||||||||
Interest expense | 30,000 | 68,000 | 66,000 | 210,000 | |||||||||||||
Other expenses, net | 19,000 | 22,000 | 43,000 | 31,000 | |||||||||||||
Income before provision for income taxes | 3,078,000 | 2,645,000 | 5,437,000 | 4,935,000 | |||||||||||||
Provision for income taxes | 1,200,000 | 1,058,000 | 2,120,000 | 1,974,000 | |||||||||||||
Net income | $ | 1,878,000 | $ | 1,587,000 | $ | 3,317,000 | $ | 2,961,000 | |||||||||
Earnings per share data: | |||||||||||||||||
Basic | $ | 0.26 | $ | 0.24 | $ | 0.45 | $ | 0.50 | |||||||||
Diluted | $ | 0.24 | $ | 0.23 | $ | 0.42 | $ | 0.46 | |||||||||
Weighted average number of shares outstanding: | |||||||||||||||||
Basic | 7,323,154 | 6,520,611 | 7,317,007 | 5,885,776 | |||||||||||||
Diluted | 7,922,811 | 7,037,829 | 7,839,360 | 6,442,380 | |||||||||||||
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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The Keith Companies, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, | December 31, | |||||||||||
2002 | 2001 | |||||||||||
(Unaudited) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 10,149,000 | $ | 12,212,000 | ||||||||
Current portion of securities held-to-maturity | 6,983,000 | 11,521,000 | ||||||||||
Contracts and trade receivables, net | 19,889,000 | 18,618,000 | ||||||||||
Costs and estimated earnings in excess of billings | 12,069,000 | 8,270,000 | ||||||||||
Prepaid expenses and other current assets | 1,423,000 | 1,458,000 | ||||||||||
Total current assets | 50,513,000 | 52,079,000 | ||||||||||
Securities held-to-maturity, less current portion | 2,053,000 | — | ||||||||||
Equipment and leasehold improvements, net | 5,083,000 | 4,921,000 | ||||||||||
Goodwill, net | 22,555,000 | 14,252,000 | ||||||||||
Other assets | 298,000 | 240,000 | ||||||||||
Total assets | $ | 80,502,000 | $ | 71,492,000 | ||||||||
Liabilities and Shareholders’ Equity | ||||||||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt and capital lease obligations | $ | 1,721,000 | $ | 459,000 | ||||||||
Trade accounts payable | 2,888,000 | 2,376,000 | ||||||||||
Accrued employee compensation | 4,349,000 | 3,091,000 | ||||||||||
Current portion of deferred tax liabilities | 3,676,000 | 2,028,000 | ||||||||||
Other accrued liabilities | 2,727,000 | 2,961,000 | ||||||||||
Billings in excess of costs and estimated earnings | 1,770,000 | 2,383,000 | ||||||||||
Total current liabilities | 17,131,000 | 13,298,000 | ||||||||||
Long-term debt and capital lease obligations, less current portion | 38,000 | 1,453,000 | ||||||||||
Issuable common stock | 4,812,000 | 1,512,000 | ||||||||||
Deferred tax liabilities | 1,092,000 | 1,271,000 | ||||||||||
Accrued rent | 248,000 | 225,000 | ||||||||||
Total liabilities | 23,321,000 | 17,759,000 | ||||||||||
Shareholders’ equity: | ||||||||||||
Preferred stock | — | — | ||||||||||
Common stock | 7,000 | 7,000 | ||||||||||
Additional paid-in-capital | 42,227,000 | 42,096,000 | ||||||||||
Retained earnings | 14,947,000 | 11,630,000 | ||||||||||
Total shareholders’ equity | 57,181,000 | 53,733,000 | ||||||||||
Total liabilities and shareholders’ equity | $ | 80,502,000 | $ | 71,492,000 | ||||||||