PITTSBURGH, May 28 /PRNewswire-FirstCall/ --
Michael Baker Corporation (Amex: BKR) today reported its financial results for
the first quarter of 2003.
(Logo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20020605/BAKERLOGO )
For the quarter, Baker posted a net loss of ($97,000) or ($0.01) per
diluted share, on total contract revenues of $99 million. This compares with
net income of $1.7 million, or $0.20 per diluted share, on total contract
revenues of $96 million in first-quarter 2002. The decline in year-over-year
earnings is attributable primarily to the overall mix of project work in the
Energy segment, which is yielding lower than expected margins; lower than
anticipated volume and labor utilization rates in the Engineering segment;
higher occupancy costs and related relocation expenses for the company's
largest office facility, which also includes its headquarters, near
Pittsburgh; and the costs associated with the infrastructure and amortization
of the company's new information systems, which were implemented on
January 1, 2003.
Revenues in the Engineering business were basically even compared to the
same period last year, while operating income before corporate overhead
allocations declined 33 percent. The major factor in the operating income
decline were the costs associated with the relocation of the company's largest
Engineering office in January, which also impacted labor utilization, and the
continuing slowness in private sector contract activity. Operating margins,
before corporate overhead, were 4.8 percent for first quarter 2003, compared
to 7.3 percent in first quarter 2002. Utilization rates have increased during
the second quarter and are expected to show continued improvement for the
remainder of the year.
Revenues in the Energy business were eight percent higher, while operating
income before corporate overhead allocations was 25 percent lower, in first
quarter 2003 than in first quarter 2002. Contributing to these results were
the significant decline in higher-margin, OPCO(R) -- related revenue, and the
lower than expected operating performance on an international contract for the
implementation of a computerized maintenance management system. The company,
however, recently announced an onshore OPCO-style agreement with Huber Energy,
a unit of J. M. Huber Corporation, and is optimistic that other similar
agreements will be concluded over the next several months.
Interest expense was ($86,000) and interest income was $4,000 for the
current quarter, compared to interest expense of ($21,000) and interest income
of $92,000 for the prior period. During the quarter, the company's short-term
liquidity was impacted by changes in its billing process related to the
implementation of the new information systems. As a result, the company
needed to access its credit facility in order to meet certain operating
expenses. Long-term debt at March 31, 2003 was $24.1 million compared to zero
at year-end 2002.
Total backlog for the company was $564 million at March 31, 2003, compared
to $545 million at year-end 2002.
Commenting on the results, President and Chief Executive Officer Donald P.
Fusilli, Jr. said, "Clearly, we are disappointed with these results. The
implementation of the new information systems created numerous distractions
for management during the quarter, as well as substantial expense to convert
data to the new system. We are realigning those resources and refocusing
their attention on new work opportunities, higher labor utilization, energy
performance and the company's overall cost structure. The billing
difficulties that we experienced during the quarter have improved in recent
weeks, and we expect a continued improvement in cash flow in June." He added
that the increase in backlog since year-end is an encouraging sign, and both
business segments continue to win new work despite the uncertain world
economy.
Michael Baker Corporation (www.mbakercorp.com) provides engineering and
energy expertise for public and private sector clients worldwide. The firm's
primary services include engineering design for the transportation and civil
infrastructure markets, operation and maintenance of oil and gas production
facilities, architecture, environmental services, and construction management
for building and transportation projects. Baker has more than 4,200 employees
in over 30 offices across the United States and internationally.
(The above information includes certain forward-looking statements
concerning future operations and performance of the Company. Forward looking
statements are subject to market, operating and economic risks and
uncertainties that may cause the Company's actual results in future periods to
be materially different from the performance suggested above. 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 anticipated levels
of government spending on infrastructure; and changes in loan relationships or
sources of financing. Such forward-looking statements are made pursuant to the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995.)
BAKER REPORTS FIRST QUARTER 2003 RESULTS
FINANCIAL SUMMARY
(Unaudited)
Operating Results For the quarter ended March 31
(In thousands, except
earnings per share) 2003 2002
Total contract revenues $99,299 $95,922
Gross profit $13,446 $14,781
(Loss)/income from operations $(111) $3,160
(Loss)/income before taxes $(179) $3,146
Net (loss)/income $(97) $1,714
Basic weighted average shares
outstanding 8,346 8,286
Basic net (loss)/income per share $(0.01) $0.21
Diluted net (loss)/income per share $(0.01) $0.20
Total Contract Revenues For the quarter ended March 31
(In millions) 2003 2002
Engineering $58.7 $58.3
Energy 40.6 37.6
Non-Core -- --
Total $99.3 $95.9
Income from Operations
without Corporate Expenses
Allocated For the quarter ended March 31
(In millions) 2003 2002
Engineering $2.8 $4.2
Energy 1.3 1.7
Non-Core 0.3 --
Subtotal - segments 4.4 5.9
Corporate/Insurance (4.5) (2.7)
Total $(0.1) $3.2
Backlog
(In thousands) At 3/31/03 At 12/31/02
Total $563,500 $545,200
Condensed Balance Sheet
(In thousands) At 3/31/03 At 12/31/02
ASSETS
Cash and cash equivalents $6,975 $9,885
Receivables 74,507 65,742
Costs in excess of billings 54,793 29,723
Prepaid expenses and other 5,739 6,220
Total current assets 142,014 111,570
Property, plant and equipment, net 19,026 17,459
Goodwill and other intangible
assets, net 9,447 9,519
Other assets 6,827 6,549
Total assets $177,314 $145,097
LIABILITIES & SHAREHOLDERS'
INVESTMENT
Accounts payable $23,617 $20,373
Accrued compensation and insurance 24,968 20,977
Other accrued expenses 24,313 25,009
Billings in excess of costs 6,579 4,191
Total current liabilities 79,477 70,550
Long-term debt 24,100 --
Other 3,147 3,128
Total liabilities 106,724 73,678
Common Stock and Series B Common
Stock 8,694 8,694
Additional paid-in capital 38,146 38,146
Other comprehensive loss (612) (569)
Retained earnings 27,315 27,411
Less - Treasury shares (2,953) (2,263)
Total shareholders' investment 70,590 71,419
Total liabilities &
shareholders' investment $177,314 $145,097