Exhibit 99.1
Baker Reports 2003 Financial Results
PITTSBURGH, March 9 /PRNewswire-FirstCall/ -- Michael Baker Corporation
(Amex: BKR) today reported its financial results for the fourth quarter and
full year of 2003.
For the full year, the company achieved net income of $2.1 million, or
$0.25 per diluted share, on total contract revenues of $426 million, compared
with net income of $9.6 million, or $1.12 per diluted share, on total contract
revenues of $405 million in 2002. Income from operations in 2003 was
$6.4 million, compared to $17.2 million in year 2002. The decline in year-
over-year earnings is attributable primarily to several factors that were
reported on throughout the year, including: the overall mix of project work
in the Energy segment, which yielded relatively lower margins; costs related
to the company's new information systems; increased medical and insurance
costs; and higher net interest expense.
The company's Engineering and Energy business segments' total contract
revenues for the year were $251 million and $175 million, respectively,
compared with the $243 million and $163 million reported in 2002. Operating
income in the Engineering and Energy segments for 2003 was $6.4 million and
$1.3 million, respectively, compared to $10.3 million and $6.6 million in
2002. Operating income before corporate overhead allocations in the
Engineering segment increased 12 percent compared to the prior year, while
operating income before corporate overhead in the Energy business declined 44
percent relative to 2002. Engineering's 2002 operating income included the
adverse impact of the litigation settlement with LTV, which occurred during
the fourth quarter. Energy's operating income decrease was the result of the
project mix mentioned above, represented by the 70 percent decline in OPCO-
related revenue, and higher than anticipated startup costs for the two onshore
Managed Services contracts initiated during the year with Huber Energy.
Operating margins for these businesses before corporate overhead allocations
were 7.1 percent for Engineering and 3.0 percent for Energy in 2003, compared
to 6.6 percent and 5.8 percent, respectively, in 2002. The margin decline in
Energy is due mainly to the segment's operating loss in the 2003 fourth
quarter, which resulted from the startup costs mentioned previously, higher
insurance costs, and costs associated with an organizational restructuring.
Net interest expense for 2003 was ($783,000) compared to a net interest
gain of $201,000 in 2002. In this connection, the company repaid $7.0 million
of long-term debt during the 2003 fourth quarter, to a year-end level of
$13.5 million.
Total backlog for the Engineering and Energy businesses at year-end 2003
was $721 million, compared to $545 million at year-end 2002. The increase is
attributable primarily to the Energy segment's addition of the two new four-
year onshore Managed Service contracts with Huber Energy, and the renewal of a
five-year operations and maintenance contract in Thailand. Engineering
backlog increased five percent in the year-over-year comparison.
In fourth quarter 2003, the company recorded net income of $890,000, or
$0.11 per diluted share, on total contract revenues of $116 million, compared
with a net loss of ($2.0) million, or ($0.24) per diluted common share, on
total contract revenues of $102 million for fourth quarter 2002.
"The year 2003 was a challenging one for Baker - disappointing with regard
to the short term, but encouraging for the longer term," Donald P. Fusilli,
Jr., president and chief executive officer, said. "Our new information
infrastructure is now in place and we are expecting to achieve operating
improvement. We also are well positioned to greatly expand our work in the
Federal sector as a result of our marketing and sales efforts in 2003.
Additionally, we are nearing the execution of our $750 million program
management contract with FEMA, and are closely examining our Energy operations
to control our costs and position the segment to more aggressively pursue
higher margin, Managed Service agreements onshore and with the new breed of
property owners in the Gulf of Mexico." He added that the company expects to
provide revenue and earnings guidance for 2004 in conjunction with the
completion of negotiations on the FEMA contract.
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 4,400 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)
Fourth Quarter Operating Results
(In thousands, except earnings per share) 2003 2002
---- ----
Total contract revenues $115,548 $102,382
Gross profit $16,357 $9,139
Income/(loss) from operations $2,645 $(2,932)
Income/(loss) before taxes $2,469 $(2,739)
Net income/(loss) $890 $(2,010)
Weighted average shares outstanding:
Basic 8,320 8,384
Diluted 8,398 8,457
Net income/(loss) per share:
Basic $0.11 $(0.24)
Diluted $0.11 $(0.24)
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Twelve Month Operating Results
(In thousands, except earnings per share) 2003 2002
---- ----
Total contract revenues $425,983 $405,264
Gross profit $61,104 $65,249
Income from operations $6,361 $17,227
Income before taxes $4,920 $17,394
Net income $2,066 $9,566
Weighted average shares outstanding:
Basic 8,324 8,351
Diluted 8,384 8,515
Net income per share:
Basic $0.25 $1.15
Diluted $0.25 $1.12
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For the quarter ended Dec. 31 For the year ended Dec. 31
2003 2002 2003 2002
-----------------------------------------------------------
Engineering
Revenue $67.6 $61.0 $250.6 $242.6
Income/(loss) from
operations
pre-Corporate overhead 6.9 (0.9) 17.9 16.0
Less: Corporate overhead (2.8) (1.2) (11.5) (5.7)
----------------------------------------------------------------------
Income/(loss) from
operations 4.1 (2.1) 6.4 10.3
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Energy
Revenue 47.9 41.3 175.4 162.6
Income/(loss) from
operations
pre-Corporate overhead (0.1) 0.7 5.3 9.5
Less: Corporate overhead (1.0) (0.6) (4.0) (2.9)
----------------------------------------------------------------------
Income/(loss) from
operations (1.1) 0.1 1.3 6.6
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Non-Core
Revenue - 0.1 - 0.1
Income/(loss) from
operations pre-Corporate
overhead (0.2) (0.5) 0.1 3.5
Less: Corporate overhead - 0.1 - (2.3)
----------------------------------------------------------------------
Income/(loss) from
operations (0.2) (0.4) 0.1 1.2
----------------------------------------------------------------------
Total reportable segments
Revenues 115.5 102.4 426.0 405.3
Income/(loss) from
operations pre-Corporate
overhead 6.6 (0.7) 23.3 29.0
Less: Corporate
overhead (3.8) (1.7) (15.5) (10.9)
----------------------------------------------------------------------
Income/(loss) from
operations 2.8 (2.4) 7.8 18.1
----------------------------------------------------------------------
----------------------------------------------------------------------
Other Corporate/
Insurance expense (0.2) (0.5) (1.4) (0.9)
----------------------------------------------------------------------
----------------------------------------------------------------------
Total Company -
Income/(loss) from
operations $2.6 $(2.9) $6.4 $17.2
----------------------------------------------------------------------
Backlog
(In thousands) At 12/31/03 At 12/31/02
-----------------------------
Total $720,700 $545,200
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Condensed Balance Sheet
(In thousands) At 12/31/03 At 12/31/02
------------------------------
ASSETS
Cash and cash equivalents $3,104 $9,885
Receivables, net 75,790 65,742
Costs in excess of billings 51,620 29,723
Prepaid expenses and other 9,899 6,220
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Total current assets 140,413 111,570
Property, plant and equipment, net 17,402 17,459
Goodwill and other intangible assets, net 9,233 9,519
Other assets 6,355 6,549
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Total assets $173,403 $145,097
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LIABILITIES & SHAREHOLDERS' INVESTMENT
Accounts payable $22,109 $20,373
Accrued compensation and insurance 25,618 20,977
Other accrued expenses 20,464 25,009
Billings in excess of costs 16,611 4,191
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Total current liabilities 84,802 70,550
Long-term debt 13,481 -
Other liabilities 2,539 3,128
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Total liabilities 100,822 73,678
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Common Stock and Series B Common Stock 8,711 8,694
Additional paid-in capital 38,298 38,146
Retained earnings 29,477 27,411
Other comprehensive loss (912) (569)
Unearned compensation (40) -
Less - Treasury shares (2,953) (2,263)
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Total shareholders' investment 72,581 71,419
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Total liabilities &
shareholders' investment $173,403 $145,097
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SOURCE Michael Baker Corporation
-0- 03/09/2004
/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 OIL
SU: ERN