NEWS RELEASE
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| | | | | | Contact: | | David Higie |
| | | | | | Phone: | | (412) 269-6449 |
| | | | | | Release: | | Immediate (Aug. 9, 2012) |
BAKER REPORTS SECOND QUARTER 2012 FINANCIAL RESULTS
PITTSBURGH — Michael Baker Corporation (NYSE MKT:BKR) today announced its financial results for the second quarter of 2012.
Unless noted otherwise, 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. Included in continuing operations are the financial results of RBF Consulting (RBF), which Baker acquired effective October 1, 2011.
For the quarter, Baker reported net income from continuing operations of $2.7 million, or $0.28 per diluted share, on revenues of $155.3 million, compared to net income from continuing operations of $5.0 million, or $0.53 per diluted share, on revenues of $130.1 million in the second quarter of 2011.
The increase in second-quarter 2012 revenue compared to the year-ago period was driven primarily by the addition of $24.4 million in revenues from RBF and increases in certain key Transportation segment projects, all of which was partially offset by a decrease in work performed for FEMA.
Operating income from continuing operations for the second quarter of 2012 was $3.2 million, compared to $7.9 million for the same period in 2011. The decrease was attributable primarily to reduced gross profit of $1.9 million, as well as an increase in selling, general and administrative (SG&A) expenses of $2.8 million. Gross profit decreased mainly due to decreased utilization of personnel, an unfavorable project mix, and an increase in amortization expenses related to the Company’s recent acquisitions, partially offset by the addition of RBF’s gross profit.
SG&A expenses totaled $22.3 million for the second quarter of 2012, compared to $19.5 million in the year-ago period. This increase resulted primarily from additional SG&A expenses of $3.7 million from RBF, including $0.2 million of intangible asset amortization, which was partially offset by a period-over-period decrease in SG&A personnel, excluding the impact of RBF.
For the first six months of 2012, the Company recorded net income from continuing operations of $3.6 million, or $0.38 per diluted common share, on revenues of $307.0 million, compared with net income from continuing operations of $5.7 million, or $0.61 per diluted common share, on revenues of $251.1 million for the first half of 2011.
The Company’s full-year forecasted effective income tax rate from continuing operations was 40.5 percent and 39.5 percent as of July 1, 2012, and June 30, 2011, respectively.
Total backlog at July 1, 2012, was $1.61 billion, compared to $1.59 billion at December 31, 2011. Of these totals, $652 million and $685 million, respectively, are considered funded backlog.
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ADD ONE — BAKER FINANCIAL RESULTS FOR SECOND QUARTER 2012
On the balance sheet as of July 1, 2012, the Company had a cash balance of $63.1 million and no debt.
Commenting on the results, President and Chief Executive Officer Bradley L. Mallory, said, “We are disappointed with our second quarter results. General market conditions are still challenging and some of our major opportunities have been delayed. We are cautiously optimistic that this situation will improve going forward.”
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, oil & gas, rail & transit, telecommunications & utilities, transportation, urban development and water. With more than 3,000 employees in over 100 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, August 9, 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 atwww.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 Moving Ahead for Progress in the 21st Century Act (MAP-21); 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.)
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ADD TWO — BAKER FINANCIAL RESULTS FOR SECOND QUARTER 2012
FINANCIAL SUMMARY
(Unaudited)
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| | | For the three months ended | | | For the six months ended | |
Operating Results | | July 1, | | | June 30, | | | July 1, | | | June 30, | |
| (In thousands, except earnings per share) | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
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Revenues | | $ | 155,297 | | | $ | 130,061 | | | $ | 306,956 | | | $ | 251,094 | |
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Gross profit | | | 25,508 | | | | 27,396 | | | | 49,325 | | | | 48,525 | |
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Operating Income | | | 3,224 | | | | 7,883 | | | | 4,636 | | | | 9,291 | |
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Income before income taxes and noncontrolling interests | | | 4,566 | | | | 8,015 | | | | 6,302 | | | | 9,545 | |
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Net income from continuing operations before noncontrolling interests | | | 2,907 | | | | 5,253 | | | | 4,049 | | | | 6,336 | |
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(Loss)/income from discontinued operations, net of tax | | | (236 | ) | | | (100 | ) | | | 501 | | | | (15 | ) |
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Less: Income attributable to noncontrolling interests | | | 223 | | | | 299 | | | | 406 | | | | 635 | |
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Net income attributable to Michael Baker Corporation | | $ | 2,448 | | | $ | 4,854 | | | $ | 4,144 | | | $ | 5,686 | |
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Earnings per share: | | | | | | | | | | | | | | | | |
Basic-continuing operations | | $ | 0.29 | | | $ | 0.53 | | | $ | 0.39 | | | $ | 0.62 | |
Diluted-continuing operations | | | 0.28 | | | | 0.53 | | | | 0.38 | | | | 0.61 | |
Basic-net income | | | 0.26 | | | | 0.52 | | | | 0.44 | | | | 0.62 | |
Diluted-net income | | $ | 0.25 | | | $ | 0.52 | | | $ | 0.43 | | | $ | 0.61 | |
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ADD THREE — BAKER FINANCIAL RESULTS FOR SECOND QUARTER 2012
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| Segment results | | | | | | | | | | | | |
| (In millions) | | For the three months ended | | | For the six months ended | |
| | | July 1, | | | June 30, | | | July 1, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
Revenues | | | | | | | | | | | | | | | | |
Transportation | | $ | 83.8 | | | $ | 75.6 | | | $ | 164.4 | | | $ | 143.2 | |
Federal | | | 71.5 | | | | 54.5 | | | | 142.6 | | | | 107.9 | |
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Total revenues | | $ | 155.3 | | | $ | 130.1 | | | $ | 307.0 | | | $ | 251.1 | |
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Gross Profit | | | | | | | | | | | | | | | | |
Transportation | | $ | 14.5 | | | $ | 14.9 | | | $ | 27.9 | | | $ | 24.4 | |
Federal | | | 11.0 | | | | 12.4 | | | | 22.3 | | | | 24.5 | |
Corporate | | | — | | | | 0.1 | | | | (0.9 | ) | | | (0.4 | ) |
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Total gross profit | | | 25.5 | | | | 27.4 | | | | 49.3 | | | | 48.5 | |
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Less: SG&A | | | | | | | | | | | | | | | | |
Transportation | | | (12.6 | ) | | | (12.0 | ) | | | (24.8 | ) | | | (24.0 | ) |
Federal | | | (9.7 | ) | | | (7.5 | ) | | | (19.9 | ) | | | (15.2 | ) |
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Total SG&A | | | (22.3 | ) | | | (19.5 | ) | | | (44.7 | ) | | | (39.2 | ) |
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Operating income | | | | | | | | | | | | | | | | |
Transportation | | | 1.9 | | | | 2.9 | | | | 3.1 | | | | 0.4 | |
Federal | | | 1.3 | | | | 4.9 | | | | 2.4 | | | | 9.3 | |
Corporate | | | — | | | | 0.1 | | | | (0.9 | ) | | | (0.4 | ) |
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Total operating income | | $ | 3.2 | | | $ | 7.9 | | | $ | 4.6 | | | $ | 9.3 | |
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Backlog | | | | | | | | As of | |
| (In millions) | | | | | | | | July 1, 2012 | | | December 31,
2011 | |
Funded | | | | | | | | | | $ | 652.0 | | | $ | 684.6 | |
Unfunded | | | | | | | | | | | 957.2 | | | | 908.6 | |
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Total | | | | | | | | | | $ | 1,609.2 | | | $ | 1,593.2 | |
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ADD FOUR — BAKER FINANCIAL RESULTS FOR SECOND QUARTER 2012
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Condensed Consolidated Balance Sheet | | As of | |
| (In thousands) | | July 1, 2012 | | | December 31,
2011 | |
ASSETS | | | | | | | | |
Cash and cash equivalents | | $ | 63,053 | | | $ | 36,050 | |
Available for sale securities | | | — | | | | 12,323 | |
Receivables, net | | | 102,751 | | | | 104,091 | |
Unbilled revenues on contracts in progress | | | 72,547 | | | | 77,713 | |
Prepaid expenses and other | | | 8,964 | | | | 8,951 | |
Prepaid income taxes | | | 5,816 | | | | 7,149 | |
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Total current assets | | | 253,131 | | | | 246,277 | |
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Property, plant and equipment, net | | | 18,694 | | | | 20,903 | |
Goodwill and other intangible assets, net | | | 99,181 | | | | 104,505 | |
Other long-term assets | | | 8,261 | | | | 8,189 | |
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Total assets | | $ | 379,267 | | | $ | 379,874 | |
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LIABILITIES & SHAREHOLDERS’ INVESTMENT | | | | | | | | |
Accounts payable | | $ | 44,833 | | | $ | 44,434 | |
Accrued compensation and insurance | | | 35,108 | | | | 36,366 | |
Billings in excess of revenues on contracts in progress | | | 21,502 | | | | 24,064 | |
Deferred income tax liability | | | 13,659 | | | | 13,659 | |
Income taxes payable | | | 223 | | | | 1,113 | |
Other accrued expenses | | | 10,967 | | | | 12,905 | |
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Total current liabilities | | | 126,292 | | | | 132,541 | |
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Deferred income tax liability | | | 16,194 | | | | 16,823 | |
Other long-term liabilities | | | 10,408 | | | | 9,881 | |
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Total liabilities | | | 152,894 | | | | 159,245 | |
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Common Stock | | | 10,148 | | | | 10,067 | |
Additional paid-in capital | | | 67,888 | | | | 66,218 | |
Retained earnings | | | 152,749 | | | | 148,605 | |
Accumulated other comprehensive loss | | | — | | | | (90 | ) |
Less — Treasury shares | | | (5,160 | ) | | | (4,888 | ) |
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Total Michael Baker Corporation shareholders’ investment | | | 225,625 | | | | 219,912 | |
Noncontrolling interests | | | 748 | | | | 717 | |
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Total shareholders’ investment | | | 226,373 | | | | 220,629 | |
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Total liabilities & shareholders’ investment | | $ | 379,267 | | | $ | 379,874 | |
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