Exhibit 99.1
Baker Reports Revenue and EPS Gains for 2004 Third Quarter
PITTSBURGH, Nov. 3 /PRNewswire-FirstCall/ -- Michael Baker Corporation
(Amex: BKR) today reported substantial increases in total contract revenues
and earnings per share for both the third quarter and first nine months of
2004 compared to the same period in 2003.
For the quarter, the company reported net income of $3.3 million, or $0.38
per diluted share, on total contract revenues of $141 million. This compares
with net income of $1.2 million, or $0.14 per diluted share, on total contract
revenues of $106 million in the third quarter of 2003. The current quarter
benefited from strong revenue and operating performances in both the
Engineering and Energy segments, as well as from lower insurance-related and
benefit costs. Earnings in the prior year quarter were adversely impacted by
the overall mix of project work and a number of administrative and operating-
related costs in both segments that were not present in the current period.
Revenues in the Engineering business increased 37 percent from the year-
ago quarter, while operating income, before corporate overhead allocations,
increased 80 percent over the same period. The major factor in the operating
income before corporate overhead improvement was a continuation of the higher
labor utilization rates that the Engineering segment has experienced
throughout the year to date, the result of the sizeable backlog it had to
begin the year and the addition of several Federal government contracts the
company has received in 2004, including the 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 9.7 percent for third-quarter 2004, compared to 7.3 percent in
third-quarter 2003.
Revenues in the Energy business increased 25 percent from the third
quarter of 2003, while operating income, before corporate overhead
allocations, rose 26 percent over the same period. The improvement in
operating income before corporate overhead is attributable primarily to an
increase in Managed Services revenues compared to the third quarter of 2003,
and higher third-quarter 2004 margins on international projects. During the
current period, the Managed Services business accounted for approximately
21 percent of the segment's total contract revenue, and included a performance
incentive payment related to its onshore contracts. Operating income before
corporate overhead expressed as a percentage of Energy segment contract
revenues was 4.4 percent for the current quarter 2004, compared to 4.3 percent
in the year-ago period.
For the first nine months of 2004, net income was $10.0 million, or $1.18
per diluted share, on total contract revenues of $396 million, compared to net
income of $1.2 million, or $0.14 per diluted share, on total contract revenues
of $310 million for the first nine months of 2003. Combined operating income
before corporate overhead allocations in the two business segments increased
84 percent on a comparative nine-month basis due to many of the factors listed
above, while operating margins, before corporate overhead allocations, were
9.6 percent for Engineering and 4.5 percent for Energy.
At September 30, 2004, total backlog for the company's businesses was
$1.5 billion compared to $0.7 billion for these same businesses at December
31, 2003.
Commenting on the results, Donald P. Fusilli, Jr., president and chief
executive officer, said: "We continue to be pleased with our performance in
2004 and are encouraged by the business and market trends heading into 2005.
On the Engineering side, the Federal market remains strong, and the eight-
month extension of TEA-21 has allowed our state transportation department
clients to award some limited projects for next year. In Energy, we are well
positioned to capitalize on the opportunities being offered by our customers
as they increase capital investments due to the higher commodity prices for
oil and gas." He added that while the company's financial results to date
include only a limited amount of incentive payments under performance-based
contracts, Baker believes that it continues to add value to the customers it
serves under these contract arrangements and is optimistic it will improve in
2005.
Michael Baker Corporation ( http://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 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 the Company's
relationship and/or contracts with FEMA; changes in anticipated levels of
government spending on infrastructure, including TEA-21; changes in loan
relationships or sources of financing; changes in management; changes in
information systems; and costs to comply with the requirements of the
Sarbanes-Oxley Act of 2002. 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 2004 2003
earnings per share) ---- ----
Total contract revenues $140,652 $106,338
Gross profit $21,986 $16,282
Income from operations $5,994 $2,677
Income before taxes $5,969 $2,508
Net income $3,283 $1,205
Weighted average shares outstanding:
Basic 8,414 8,320
Diluted 8,541 8,391
Net income per share:
Basic $0.39 $0.14
Diluted $0.38 $0.14
=======================================================================
Operating Results For the nine months ended September 30
----------------- --------------------------------------
(In thousands, except 2004 2003
earnings per share) ---- ----
Total contract revenues $396,259 $310,436
Gross profit $66,917 $44,747
Income from operations $17,512 $3,716
Income before taxes $18,157 $2,451
Net income $9,986 $1,176
Weighted average shares outstanding:
Basic 8,379 8,326
Diluted 8,496 8,382
Net income per share:
Basic $1.19 $0.14
Diluted $1.18 $0.14
========================================================================
For the three For the nine
Segment results months ended months ended
--------------- ----------------- -----------------
(In millions) 9/30/04 9/30/03 9/30/04 9/30/03
------- ------- ------- --------
Engineering
-----------
Revenues $86.0 $62.6 $242.0 $182.9
Income from operations before
Corporate overhead 8.3 4.6 23.2 10.9
Less: Corporate overhead (2.9) (2.8) (8.5) (8.7)
--------------------------------------------------------------------------
Income from operations 5.4 1.8 14.7 2.2
--------------------------------------------------------------------------
Energy
------
Revenues 54.7 43.7 154.2 127.5
Income from operations before
Corporate overhead 2.4 1.9 6.9 5.5
Less: Corporate overhead (1.2) (0.9) (3.5) (3.1)
--------------------------------------------------------------------------
Income from operations 1.2 1.0 3.4 2.4
--------------------------------------------------------------------------
Non-Core
--------
Revenues - - - -
Income from operations before
Corporate overhead - 0.1 0.2 0.3
Less: Corporate overhead - - - -
--------------------------------------------------------------------------
Income from operations - 0.1 0.2 0.3
--------------------------------------------------------------------------
Total Reportable Segments
-------------------------
Revenues 140.7 106.3 396.2 310.4
Income from operations before
Corporate overhead 10.7 6.6 30.3 16.7
Less: Corporate overhead (4.1) (3.7) (12.0) (11.8)
--------------------------------------------------------------------------
Income from operations 6.6 2.9 18.3 4.9
--------------------------------------------------------------------------
Other Corporate/Insurance expense (0.6) (0.2) (0.8) (1.2)
--------------------------------------------------------------------------
Total Company - Income from operations $6.0 $2.7 $17.5 $3.7
==========================================================================
Backlog
-------
(In millions) At 9/30/04 At 12/31/03
---------- -----------
Total $1,522.1 $720.7
====================================================================
Condensed Balance Sheet
-----------------------
(In thousands) At 9/30/04 At 12/31/03
---------- -----------
ASSETS
Cash and cash equivalents $11,396 $9,274
Receivables, net 84,393 74,940
Costs in excess of billings 61,295 51,620
Prepaid expenses and other 10,655 9,899
------------------------------------------------------------------------
Total current assets 167,739 145,733
Property, plant and equipment, net 17,063 17,402
Goodwill and other intangible assets, net 9,019 9,233
Other assets 7,961 7,205
------------------------------------------------------------------------
Total assets $201,782 $179,573
========================================================================
LIABILITIES & SHAREHOLDERS' INVESTMENT
Accounts payable $40,662 $28,279
Accrued compensation and insurance 39,264 25,618
Other accrued expenses 22,427 20,464
Billings in excess of costs 12,829 16,611
------------------------------------------------------------------------
Total current liabilities 115,182 90,972
Long-term debt - 13,481
Other liabilities 2,987 2,539
------------------------------------------------------------------------
Total liabilities 118,169 106,992
------------------------------------------------------------------------
Common Stock 8,816 8,711
Additional paid-in capital 39,298 38,298
Retained earnings 39,463 29,477
Other comprehensive loss (929) (912)
Unearned compensation expense (82) (40)
Less - Treasury shares (2,953) (2,953)
------------------------------------------------------------------------
Total shareholders' investment 83,613 72,581
------------------------------------------------------------------------
Total liabilities &
shareholders' investment $201,782 $179,573
========================================================================
SOURCE Michael Baker Corporation
-0- 11/03/2004
/CONTACT: David Higie of Michael Baker Corporation, +1-412-269-6449/
/Photo: http://www.newscom.com/cgi-bin/prnh/20020605/BAKERLOGO
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/Web site: http://www.mbakercorp.com /
(BKR)
CO: Michael Baker Corporation
ST: Pennsylvania
IN: CST OIL
SU: ERN