Exhibit 99.1
Baker Reports Revenue and EPS Gains for 2004 Second Quarter
PITTSBURGH, Aug. 2 /PRNewswire-FirstCall/ -- Michael Baker Corporation
(Amex: BKR) today reported a 25 percent increase in total contract revenues
and a significant increase in earnings per share for both the second quarter
and first six months of 2004 compared to the same periods in 2003.
For the quarter, Baker posted net income of $3.6 million, or $0.42 per
diluted share, on total contract revenues of $131 million. This compares with
net income of $68,000, or $0.01 per diluted share, on total contract revenues
of $105 million in second-quarter 2003. The current quarter benefited from a
particularly strong revenue and operating performance in the Engineering
segment, favorable insurance loss reserves and other adjustments. The 2003
second quarter was adversely impacted by the impairment of an investment in a
startup Energy company, a number of operating and other factors, including
project mix in the Energy segment and lower than anticipated volume and labor
utilization rates in the Engineering segment, and costs associated with the
company's new information systems.
Revenues in the Engineering business increased 32 percent from the year-
ago quarter, while operating income, before corporate overhead allocations,
increased 119 percent over the same period. The major factor in the operating
income before corporate overhead improvement was a significant increase in
labor utilization rates during the quarter compared to second-quarter 2003,
the result of the substantial backlog of work the segment had to begin 2004,
including the up to $750 million Program Management contract with the Federal
Emergency Management Agency (FEMA). Operating income before corporate
overhead expressed as a percentage of Engineering segment contract revenues
was 9.6 percent for second-quarter 2004, compared to 5.7 percent in second-
quarter 2003.
Revenues in the Energy business increased 15 percent from the second
quarter of 2003, while operating income, before corporate overhead
allocations, declined (6.5%) due to increases in accruals to fund the
company's short-term and recently enacted long-term incentive compensation
programs at maximum levels. Operating income before corporate overhead
expressed as a percentage of Energy segment contract revenues was 4.3 percent
for the current quarter 2004, compared to 5.3 percent in the year-ago period.
Net interest expense was $24,000 for the current quarter, compared to net
interest expense of $216,000 for the prior period. At June 30, 2004, the
company had borrowings of $1.1 million, a reduction of approximately $2.8
million from borrowing levels at March 31, 2004.
Total backlog for the company was $1.48 billion at June 30, 2004, compared
to $721 million at year-end 2003.
For the first six months of 2004, the company recorded net income of
$6.7 million, or $0.79 per diluted common share, on total contract revenues of
$256 million, as compared to a net loss of $29,000, or $0.00 per diluted
share, on total contract revenues of $204 million in the first six months of
2003.
Commenting on the results, President and Chief Executive Officer Donald P.
Fusilli, Jr., said, "We are pleased with our second quarter and first half
results, as they reflect the progress Baker has achieved in both business
segments. Our investments to expand in the Federal sector in Engineering and
emphasize Managed Services onshore in Energy are showing positive returns.
This broad base of business has allowed us to take advantage of numerous and
varied opportunities both nationally as well as internationally."
He added that discounting one-time adjustments for insurance loss reserves
and other items, the company's second quarter results are in line with its
guidance. "We are reviewing our operations plan for the second half of the
year and, if necessary, will provide revised 2004 revenue and earnings
guidance at a later date."
Michael Baker Corporation has scheduled a conference call and webcast for
Tuesday, August 3 at 9:00 AM Eastern Daylight Time to discuss the quarterly
results. Please call 800-860-2442 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 http://www.mbakercorp.com .
Michael Baker Corporation 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 4,500 employees in over 40
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.)
FINANCIAL SUMMARY
(Unaudited)
Operating Results For the quarter ended June 30
================= =============================
(In thousands, except earnings per share)
2004 2003
==== ====
Total contract revenues $130,603 $104,799
Gross profit $23,990 $15,019
Income from operations $6,134 $1,150
Income before taxes $6,342 $122
Net income $3,605 $68
Weighted average shares outstanding:
Basic 8,402 8,312
Diluted 8,518 8,361
Net income per share:
Basic $0.43 $0.01
Diluted $0.42 $0.01
=======================================================================
Operating Results For the six months ended June 30
================= ================================
(In thousands, except earnings per share)
2004 2003
==== ====
Total contract revenues $255,607 $204,098
Gross profit $44,931 $28,465
Income from operations $11,519 $1,039
Income/(loss) before taxes $12,187 $(57)
Net income/(loss) $6,703 $(29)
Weighted average shares outstanding:
Basic 8,361 8,329
Diluted 8,471 8,377
Net income per share:
Basic $0.80 $-
Diluted $0.79 $-
=======================================================================
For the three For the six
Segment results months ended months ended
=============== =============== ================
(In millions) 6/30/04 6/30/03 6/30/04 6/30/03
======= ======= ======= =======
Engineering
===========
Revenues $81.1 $61.6 $156.0 $120.3
Income from operations before
Corporate overhead 7.8 3.5 14.9 6.4
Less: Corporate overhead (2.8) (3.0) (5.5) (6.0)
=======================================================================
Income/(loss) from operations 5.0 0.5 9.4 0.4
=======================================================================
Energy
======
Revenues 49.5 43.2 99.6 83.8
Income from operations before
Corporate overhead 2.1 2.3 4.6 3.5
Less: Corporate overhead (1.2) (1.0) (2.4) (2.1)
=======================================================================
Income from operations 0.9 1.3 2.2 1.4
=======================================================================
Non-Core
========
Revenues - - - -
Income from operations before
Corporate overhead - (0.1) 0.2 0.2
Less: Corporate overhead - - - -
=======================================================================
Income from operations - (0.1) 0.2 0.2
=======================================================================
Total Reportable Segments
=========================
Revenues 130.6 104.8 255.6 204.1
Income from operations before
Corporate overhead 9.9 5.7 19.7 10.1
Less: Corporate overhead (4.0) (4.0) (7.9) (8.1)
=======================================================================
Income from operations 5.9 1.7 11.8 2.0
=======================================================================
Other Corporate/Insurance
income/(expense) 0.2 (0.5) (0.3) (1.0)
=======================================================================
Total Company - Income/(loss) from
operations $6.1 $1.2 $11.5 $1.0
=======================================================================
Backlog
========
(In thousands) At 6/30/04 At 12/31/03
========== ===========
Total $1,477,400 $720,700
Condensed Balance Sheet
=======================
(In thousands) At 6/30/04 At 12/31/03
========== ===========
ASSETS
Cash and cash equivalents $11,039 $9,274
Receivables, net 82,666 74,940
Costs in excess of billings 49,053 51,620
Prepaid expenses and other 4,704 9,899
=======================================================================
Total current assets 147,462 145,733
Property, plant and equipment, net 16,694 17,402
Goodwill and other intangible
assets, net 9,090 9,233
Other assets 7,120 7,205
=======================================================================
Total assets $180,366 $179,573
=======================================================================
LIABILITIES & SHAREHOLDERS'
INVESTMENT
Current portion of long-term debt $1,079 $-
Accounts payable 33,395 28,279
Accrued compensation and insurance 33,455 25,618
Other accrued expenses 18,597 20,464
Billings in excess of costs 11,132 16,611
=======================================================================
Total current liabilities 97,658 90,972
Long-term debt - 13,481
Other liabilities 2,460 2,539
=======================================================================
Total liabilities 100,118 106,992
=======================================================================
Common Stock 8,800 8,711
Additional paid-in capital 39,204 38,298
Retained earnings 36,180 29,477
Other comprehensive loss (881) (912)
Unearned compensation expense (102) (40)
Less - Treasury shares (2,953) (2,953)
=======================================================================
Total shareholders' investment 80,248 72,581
=======================================================================
Total liabilities &
shareholders' investment $180,366 $179,573
=======================================================================
SOURCE Michael Baker Corporation
-0- 08/02/2004
/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 CCA MAV