Exhibit 99.1
Baker Reports Third Quarter 2003 Financial Results
PITTSBURGH, Nov. 13 /PRNewswire-FirstCall/ -- Michael Baker Corporation
(Amex: BKR) today announced its financial results for the third quarter of
2003.
For the quarter, the company reported net income of $1.2 million, or
$0.14 per diluted share, on total contract revenues of $106 million. This
compares with net income of $6.4 million, or $0.75 per diluted share, on
revenues of $102 million in the third quarter of 2002. The year-ago quarter
included a gain of $0.38 per diluted share resulting from a litigation
settlement. Earnings in the current quarter were adversely impacted by costs
related to the company's new information systems, higher net interest expense,
and the overall mix of project work and higher medical and insurance costs in
both the Engineering and Energy business segments.
The company's Engineering and Energy business segments' total contract
revenues for the current period were $62.6 million and $43.7 million,
respectively, a slight increase over the $61.4 million and $40.8 million
reported in third quarter 2002. The 7.1 percent increase in Energy revenue is
attributable to two international contracts that commenced during the second
half of 2002, and the addition of a new onshore OPCO(R) -style contract with
Huber Energy that began during the second quarter of 2003. Engineering
revenue continues to run virtually even with 2002 due to continued slowness in
private sector contract activity. Operating income before corporate overhead
allocations for the two segments decreased 37 percent, largely the result of
the factors mentioned above. Operating margins, before corporate overhead
allocations, were 7.3 percent for Engineering and 4.6 percent for Energy.
For the first nine months of 2003, net income was $1.2 million, or
$0.14 per diluted share, on revenues of $310 million, compared to net income
of $11.6 million, or $1.36 per diluted share, which includes the
$0.38 litigation settlement impact noted above, on revenues of $303 million
for the first nine months of 2002. Combined operating income before corporate
overhead allocations in the two business segments decreased 36 percent on a
comparative nine-month basis due to many of the factors listed above, while
operating margins, before corporate overhead allocations, were 6.0 percent for
Engineering and 4.3 percent for Energy.
At the end of the third quarter, bank borrowings totaled $20.5 million, a
decrease of $12.8 million from June 30, 2003, due to a reduction in net
working capital during the period. In this connection, the company recently
extended the maturity date of its $40 million credit facility and, as part of
that extension, two of the financial covenants were amended and one was
eliminated. Based on the amendments to these covenants, and the company's
expectations that it will be in compliance with its covenants for at least the
next year, the company has reflected its bank borrowings as long-term
liabilities on its balance sheet.
At September 30, 2003, total backlog for the company's businesses was
$744 million compared to $545 million for these same businesses at
December 31, 2002. The substantial increase in backlog results from several
new or extended contracts in the Engineering segment, and a second onshore
OPCO contract with Huber Energy that was announced in September.
Commenting on the results, Donald P. Fusilli, Jr., president and chief
executive officer, said: "While we continue to be disappointed with our
performance to date in 2003, we are encouraged by the recent reorganization of
our operations management teams and the strengthening of our key markets. The
addition of several Federal government awards with the Departments of Defense
and Homeland Security, including our selection as the preferred firm to
negotiate the FEMA multi-hazard mapping contract, and the expansion of our
onshore OPCO model, are positive signs heading into 2004. In addition, we are
cautiously optimistic about the approval of a new, multi-year transportation
infrastructure spending bill early next year. We are in the initial phase of
finalizing the FEMA agreement and are formalizing our plans for controlling
our cost of operations. We anticipate that these important elements of our
2004 plan will be concluded before the end of the year."
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 anticipated
levels of government spending on infrastructure; and changes in loan
relationships or sources. Such forward looking statements are made pursuant
to the Safe Harbor Provisions of the Private Securities Litigation Reform Act
of 1995.)
FINANCIAL SUMMARY
(Unaudited)
Operating Results For the quarter ended September 30
----------------------------------
(In thousands, except earnings per
share) 2003 2002
------ ------
Total contract revenues $106,338 $102,200
Gross profit $16,282 $23,487
Income from operations $2,677 $10,843
Income before taxes $2,508 $10,762
Net income $1,205 $6,376
Basic weighted average shares
outstanding 8,320 8,386
Basic net income per share $0.14 $0.76
Diluted net income per share $0.14 $0.75
------------------------------------------------------------------------
Operating Results For the nine months ended September 30
--------------------------------------
(In thousands, except earnings per
share) 2003 2002
------ ------
Total contract revenues $310,436 $302,881
Gross profit $44,747 $56,110
Income from operations $3,716 $20,159
Income before taxes $2,451 $20,132
Net income $1,176 $11,576
Basic weighted average shares
outstanding 8,326 8,340
Basic net income per share $0.14 $1.39
Diluted net income per share $0.14 $1.36
------------------------------------------------------------------------
Total Contract Revenues For the three For the nine
months ended months ended
(In millions) 9/30/03 9/30/02 9/30/03 9/30/02
-----------------------------------
Engineering $62.6 $61.4 $182.9 $181.6
Energy 43.7 40.8 127.5 121.3
Non-Core - - - -
------------------------------------------------------------------------
Total $106.3 $102.2 $310.4 $302.9
------------------------------------------------------------------------
Income from Operations
without Corporate Expenses Allocated For the three For the nine
months ended months ended
(In millions) 9/30/03 9/30/02 9/30/03 9/30/02
-----------------------------------
Engineering $4.6 $6.6 $11.0 $17.0
Energy 2.0 3.8 5.5 8.8
Non-Core - 4.6 0.2 4.0
------------------------------------------------------------------------
Subtotal - segments 6.6 15.0 16.7 29.8
Corporate/Insurance (3.9) (4.2) (13.0) (9.6)
------------------------------------------------------------------------
Total $2.7 $10.8 $3.7 $20.2
------------------------------------------------------------------------
Backlog
(In thousands) At 9/30/03 At 12/31/02
---------- -----------
Total $744,100 $545,200
------------------------------------------------------------------------
Condensed Balance Sheet
(In thousands) At 9/30/03 At 12/31/02
---------- -----------
ASSETS
Cash and cash equivalents $7,080 $9,885
Receivables, net 79,702 65,742
Costs in excess of billings 46,169 29,723
Prepaid expenses and other 5,978 6,220
------------------------------------------------------------------------
Total current assets 138,929 111,570
Property, plant and equipment, net 17,702 17,459
Goodwill and other intangible
assets, net 9,304 9,519
Other assets 7,365 6,549
------------------------------------------------------------------------
Total assets $173,300 $145,097
------------------------------------------------------------------------
LIABILITIES & SHAREHOLDERS'
INVESTMENT
Accounts payable $22,756 $20,373
Accrued compensation and insurance 26,164 20,977
Other accrued expenses 17,648 25,009
Billings in excess of costs 11,092 4,191
------------------------------------------------------------------------
Total current liabilities 77,660 70,550
Long-term debt 20,461 -
Other 3,231 3,128
------------------------------------------------------------------------
Total liabilities 101,352 73,678
------------------------------------------------------------------------
Common Stock 8,711 8,694
Additional paid-in capital 38,301 38,146
Retained earnings 28,587 27,411
Other comprehensive loss (651) (569)
Unearned compensation expense (47) -
Less - Treasury shares (2,953) (2,263)
-------------------------------------------------------------------------
Total shareholders' investment 71,948 71,419
-------------------------------------------------------------------------
Total liabilities &
shareholders' investment $173,300 $145,097
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SOURCE Michael Baker Corporation
-0- 11/13/2003
/CONTACT: David Higie of Michael Baker Corporation, +1-412-269-6449/
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/Web site: http://www.mbakercorp.com/
(BKR)
CO: Michael Baker Corporation
ST: Pennsylvania
IN: CST
SU: ERN