Activity levels at the Company’s Data and Analytics Services segment held up well given the state of the global economy, and we were able to sign a significant multi-year, multi-million-dollar order with a blue-chip customer in the financial services vertical in March. Demand for the Company’s IT Staffing Services segment started totaper-off during the second half of the first quarter, particularly with clients in hard hit industries such as transportation, energy and manufacturing.
Commenting on the Company’s financial position, Jack Cronin, Mastech Digital’s Chief Financial Officer, stated, “During the first quarter, we reduced bank debt by $3.4 million, improved our leverage ratios and increased our cash availability under our credit facility to $15.2 million from $13 million atyear-end 2019. Continuing our strong liquidity position will be a top priority during these uncertain times.”
About Mastech Digital, Inc.:
Mastech Digital (NYSE American: MHH) is a leading provider of Digital Transformation IT Services. The Company offers Data Management and Analytics Solutions, Digital Learning, and IT Staffing Services with aDigital First approach. A minority-owned enterprise, Mastech Digital is headquartered in Pittsburgh, PA with offices across the U.S., Canada, EMEA, India and ASEAN.
Use ofNon-GAAP Measures:
This press release containsnon-GAAP financial measures to supplement our financial results presented on a GAAP basis. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use ofnon-GAAP financial measures as an analytical tool. Reconciliations of thesenon-GAAP measures to their comparable GAAP measures are included in the attached financial tables.
We believe that providingnon-GAAP net income andnon-GAAP diluted earnings per share offers investors useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allows for greater transparency with respect to key metrics used by management in operating our business. Additionally, management uses thesenon-GAAP financial measures in evaluating the Company’s performance.
Specifically, thenon-GAAP financial measures contained herein exclude the following expense items:
Amortization of acquired intangible assets: We amortize intangible assets acquired in connection with our June 2015 acquisition of Hudson IT and our July 2017 acquisition of the services division of InfoTrellis, Inc. We exclude these amortization expenses in ournon-GAAP financial measures because we believe it allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates a helpful comparison of our results with other periods.
Stock-based compensation expenses: We incur material recurring expense related tonon-cash, stock-based compensation. We exclude these expenses in ournon-GAAP financial measures because we believe that it provides investors with meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under ASC 718, we believe that providingnon-GAAP financial measures that exclude these expenses allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates comparison of our results with other periods.
