Exhibit 99.1
| | |
| | | |
 | | News Release |
| | | | | |
|
| | | Contact: | | David Higie |
| | | Phone: | | (412) 269-6449 |
| | | Release: | | Immediate (May 5, 2011) |
BAKER REPORTS FIRST QUARTER 2011 FINANCIAL RESULTS
PITTSBURGH — Michael Baker Corporation (NYSE Amex:BKR) today announced its financial results for the first quarter of 2011.
As reported previously, the Company acquired The LPA Group Inc. on May 3, 2010, and these financial results include LPA’s results for the reporting period. In addition, in 2009 the Company sold its former Energy business and, as a result of this disposition, the financial results of the former Energy segment have been reclassified as discontinued operations for all periods presented in the consolidated financial statements. The information and discussion contained in this news release pertains to Baker’s continuing operations, while the Company’s Form 10-Q, which is being filed with the SEC concurrent with this announcement, presents a complete discussion of both continuing and discontinued operations.
For the quarter, Baker reported net income from continuing operations of $0.7 million, or $0.08 per diluted share, on revenues of $121.0 million, compared to net income from continuing operations of $4.6 million, or $0.52 per diluted share, on revenues of $111.7 million in the first quarter of 2010.
The increase in first-quarter 2011 revenues resulted from a 38 percent increase in Transportation revenues, primarily driven by revenues from LPA, offset by a decrease in revenues from the Federal business segment. The decrease in Federal revenues is primarily attributable to declines of $5.5 million in work performed for our unconsolidated subsidiary operating in Iraq, $2.5 million in work performed for FEMA, and $4.0 million on other Federal segment contracts, all of which was partially offset by an increase of $1.9 million related to work performed for the NAVFAC-Atlantic Division.
Operating income from continuing operations for the first quarter of 2011 was $1.4 million, compared to $6.9 million for the same period in 2010. The decrease was attributable to the decline in Federal segment revenues noted previously, an overall increase in selling, general and administrative expenses, driven primarily by the LPA acquisition, and amortization expenses for intangible assets related to the LPA acquisition.
In response to this decline in operating income, as well as the budgetary uncertainty at all levels of government that is exerting downward pressure on the Company’s revenues, the Company in early April implemented a cost reduction program which included a reduction in force, a hiring freeze, and other cost savings initiatives. The Company expects restructuring charges related to severance payments and medical benefits provided to terminated employees to be approximately $1.7 million, which will be recognized as a one-time expense in the second quarter of 2011.
—more—
ADD ONE — BAKER FINANCIAL RESULTS FOR FIRST QUARTER 2011
The Company’s provision for income taxes was 37.5 percent at March 31, 2011 and 2010.
Total backlog at March 31, 2011, was $1.54 billion, compared to $1.58 billion at December 31, 2010. Of these totals, $563 million and $570 million, respectively, are considered funded backlog.
On the balance sheet as of March 31, 2011, the Company had cash and investment balances of $92.4 million and no debt.
Commenting on the results, President and Chief Executive Officer Bradley L. Mallory, said: “While not totally unexpected, we are disappointed with our first quarter performance. Our local, state and federal government clients were and will remain hesitant to spend funds on new and existing projects as long as budget uncertainties prevail. We did, however, experience an increase in work in March and expect to see continued progress in the second quarter. That, along with the impact of our cost reduction program, should enable us to record gradual improvement for the remainder of the year.”
Michael Baker Corporation (www.mbakercorp.com) provides engineering, design, planning and construction services for its clients’ most complex challenges worldwide. The firm’s primary business areas are architecture, aviation, defense, environmental, geospatial, homeland security, municipal & civil, pipelines & utilities, rail & transit, transportation and water. With more than 2,800 employees in nearly 90 offices across the United States, Baker is focused on creating value by delivering innovative and sustainable solutions for infrastructure and the environment.
Conference Call
Michael Baker Corporation has scheduled a conference call and webcast for Thursday, May 5, at 10:00 AM Eastern Daylight Savings Time to discuss these results. Please call 877-769-6805 at least 10 minutes prior to the start of the call. To access the webcast, please visit the investor relations portion of Baker’s website at www.mbakercorp.com.
(The above information contains forward-looking statements concerning our future operations and performance. Forward-looking statements are subject to market, operating and economic risks and uncertainties that may cause our actual results in future periods to be materially different from any future performance suggested herein. Factors that may cause such differences include, among others: increased competition; increased costs; changes in general market conditions; changes in industry trends; changes in the regulatory environment; changes in our relationship and/or contracts with the Federal Emergency Management Agency (“FEMA”); changes in anticipated levels of government spending on infrastructure, including the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (“SAFETEA-LU”); changes in loan relationships or sources of financing; changes in management; changes in information systems, and acquisition-related activity. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.)
—more—
ADD TWO — BAKER FINANCIAL RESULTS FOR FIRST QUARTER 2011
FINANCIAL SUMMARY
(Unaudited)
| | | | | | | | | |
| First Quarter Operating Results | | For the quarter ended March 31, |
| (In thousands, except earnings per share) | | 2011 | | 2010 |
| | | | | | | | | |
| Revenues | | $ | 121,033 | | | $ | 111,660 | |
| | | | | | | | | |
| Gross profit | | | 21,129 | | | | 21,519 | |
| | | | | | | | | |
| Operating income | | | 1,409 | | | | 6,920 | |
| | | | | | | | | |
| Income before income taxes and noncontrolling interests | | | 1,532 | | | | 7,665 | |
| | | | | | | | | |
| Net income from continuing operations attributable to Michael Baker Corporation | | | 748 | | | | 4,613 | |
| | | | | | | | | |
| Income/(Loss) from discontinued operations, net of tax | | | 84 | | | | (628 | ) |
| | | | | | | | | |
| Net income attributable to Michael Baker Corporation | | $ | 832 | | | $ | 3,985 | |
| | | | | | | | | |
| Earnings per share: | | | | | | | | |
| Basic-continuing operations | | $ | 0.08 | | | $ | 0.52 | |
| Diluted-continuing operations | | | 0.08 | | | | 0.52 | |
| Basic-net income | | | 0.09 | | | | 0.45 | |
| Diluted-net income | | $ | 0.09 | | | $ | 0.45 | |
-more-
ADD THREE — BAKER FINANCIAL RESULTS FOR FIRST QUARTER 2011
Segment Results (Unaudited)
(In millions)
| | | | | | | | | |
| | | For the quarter ended March 31 | |
| | | 2011 | | | 2010 | |
| | | |
| | | | | | | | | |
Revenues | | | | | | | | |
| Transportation | | $ | 70.2 | | | $ | 50.9 | |
| Federal | | | 50.8 | | | | 60.8 | |
| |
Total revenues | | $ | 121.0 | | | $ | 111.7 | |
| |
| | | | | | | | | |
Gross Profit | | | | | | | | |
| Transportation | | $ | 9.8 | | | $ | 8.7 | |
| Federal | | | 11.7 | | | | 12.8 | |
| Corporate | | | (0.4 | ) | | | — | |
| |
Total gross profit | | | 21.1 | | | | 21.5 | |
| |
Less: SG&A | | | | | | | | |
| Transportation | | | (12.5 | ) | | | (7.1 | ) |
| Federal | | | (7.2 | ) | | | (7.5 | ) |
| |
Total SG&A | | | (19.7 | ) | | | (14.6 | ) |
| |
Total operating (loss)/income | | | | | | | | |
| Transportation | | | (2.7 | ) | | | 1.6 | |
| Federal | | | 4.5 | | | | 5.3 | |
| Corporate | | | (0.4 | ) | | | — | |
| |
Total operating income | | $ | 1.4 | | | $ | 6.9 | |
| |
| | | | | | | | | |
| Backlog | | As of | |
| | | March 31, | | | December 31, | |
| (In millions) | | 2011 | | | 2010 | |
| |
| Funded | | $ | 563.2 | | | $ | 569.5 | |
| Unfunded | | | 977.1 | | | | 1,005.6 | |
| |
Total | | $ | 1,540.3 | | | $ | 1,575.1 | |
| |
-more-
ADD FOUR — BAKER FINANCIAL RESULTS FOR FIRST QUARTER 2011
| | | | | | | | | |
| Condensed Consolidated Balance Sheets | | As of | |
| | | March 31, | | | December 31, | |
| (In thousands) | | 2011 | | | 2010 | |
| |
ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 80,091 | | | $ | 77,443 | |
| Available for sale securities | | | 12,352 | | | | 9,795 | |
| Receivables, net | | | 72,926 | | | | 73,681 | |
| Unbilled revenues on contracts in progress | | | 56,965 | | | | 58,884 | |
| Prepaid expenses and other | | | 7,420 | | | | 10,400 | |
| |
Total current assets | | | 229,754 | | | | 230,203 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 17,261 | | | | 16,847 | |
| Goodwill and other intangible assets, net | | | 66,273 | | | | 68,010 | |
| Other long-term assets | | | 6,146 | | | | 6,005 | |
| |
Total assets | | $ | 319,434 | | | $ | 321,065 | |
| |
| | | | | | | | | |
LIABILITIES & SHAREHOLDERS’ INVESTMENT | | | | | | | | |
| Accounts payable | | $ | 33,525 | | | $ | 38,918 | |
| Accrued compensation and insurance | | | 36,286 | | | | 32,630 | |
| Billings in excess of revenues on contracts in progress | | | 17,564 | | | | 18,816 | |
| Other accrued expenses | | | 16,088 | | | | 15,865 | |
| |
Total current liabilities | | | 103,463 | | | | 106,229 | |
| | | | | | | | | |
| Other long-term liabilities | | | 17,780 | | | | 18,299 | |
| |
Total liabilities | | | 121,243 | | | | 124,528 | |
| |
| | | | | | | | | |
| Common Stock | | | 9,789 | | | | 9,718 | |
| Additional paid-in capital | | | 60,278 | | | | 59,637 | |
| Retained earnings | | | 132,133 | | | | 131,301 | |
| Accumulated other comprehensive loss | | | (96 | ) | | | (80 | ) |
| Less — Treasury shares | | | (4,761 | ) | | | (4,761 | ) |
| |
Total Michael Baker Corporation shareholders’ investment | | | 197,343 | | | | 195,815 | |
| Noncontrolling interests | | | 848 | | | | 722 | |
| |
Total shareholders’ investment | | | 198,191 | | | | 196,537 | |
| |
Total liabilities & shareholders’ investment | | $ | 319,434 | | | $ | 321,065 | |
| |
# # # #
