EXHIBIT 99.1
[MSX INTERNATIONAL LOGO]
DAVID CRITTENDEN -- FINANCIAL
MSX INTERNATIONAL
248-829-6031
DCRITTENDEN@MSXI.COM
BRUCE WAGNER -- MEDIA
MSX INTERNATIONAL
248-829-6254
BWAGNER@MSXI.COM
MSX INTERNATIONAL ANNOUNCES FIRST QUARTER 2003 FINANCIAL RESULTS
SOUTHFIELD, MICH., MAY 12, 2003 -- MSX International, a provider of technical
business services, announced sales totaling $183.4 million for the first quarter
of 2003, which ended March 30, 2003. This compares to $205.5 million in the same
quarter one year ago. The 11% decline in net sales reflects the removal of sales
from under-performing businesses that were exited in 2002 and lower demand for
automotive engineering and human capital management services.
Gross profit in the first quarter of 2003 was $20.2 million, or 11.0% of net
sales. This compares to $26.7 million, or 13.0% of net sales one year earlier.
Reduced gross profit was due to lower sales, price decreases for selected
services, and costs associated with underutilized equipment and facilities.
Actions in late 2002 to reduce direct and indirect operating costs resulted in
savings that had a favorable impact on gross profit totaling more than $2
million in the first quarter of 2003.
Selling, general and administrative expenses decreased $4.2 million to $15.7
million in the first quarter of 2003, reflecting cost savings achieved in these
activities since the first quarter of 2002. Actions taken in 2002 to realign
these costs to support current business levels are expected to produce
annualized savings of about $12 million in 2003.
The company's operating income of $3.0 million for the quarter also included
$1.4 million of additional restructuring and severance costs. These costs relate
to the restructuring program that began in the fourth quarter of 2002. Excluding
these costs, MSX International's operating income in the first quarter was $4.5
million, compared to $6.8 million one year earlier. A net first quarter loss of
$3.6 million includes a modest increase in interest expense due primarily to
recent changes to credit arrangements.
Commenting on the results, Frederick K. Minturn, executive vice president and
chief financial officer, stated, "Our results in the first quarter reflect the
positive impact of late 2002 cost reduction plans, which are now substantially
implemented. We are on track to achieve our 2003 business plan."
MSX International will host a conference call at 10:00 a.m. EDT on Tuesday, May
13, to review these results. To listen to the call, dial 212-676-5386 and
provide reservation number 21141191. A replay of the call will be available
beginning at 12:00 p.m. EDT Tuesday, May 13, at 800-633-8284 (Domestic) or
402-977-9140 (International), with the same reservation number.
MSX International, headquartered in Southfield, Mich., is a global provider of
technical business services. The company combines innovative people,
standardized processes and today's technologies to deliver a collaborative,
competitive advantage on a global basis. With annual sales of over $800 million,
MSX International has 8,000 employees in 26 countries. Visit their Web site at
http://www.msxi.com.
###
Certain of the statements made in this press release including the success of
restructuring activities and other operational improvements constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based on
current management projections and expectations. They involve significant risks
and uncertainties. As such, they are not guarantees of future performance. MSX
International disclaims any intent or obligation to update such statements.
Actual results may vary materially from those in the forward-looking statements
as a result of any number of factors, many of which are beyond the control of
management. These important factors include: our leverage and related exposure
to changes in interest rates; our reliance on major customers in the automotive
industry and the timing of their product development and other initiatives; the
market demand for our technical business services in general; our ability to
recruit and place qualified personnel; delays or unexpected costs associated
with cost reduction efforts; risks associated with operating internationally,
including economic, political and currency risks; and risks associated with our
acquisition strategy. Additional information concerning these and other factors
are discussed under the heading "Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Company's Annual Report
on Form 10-K (dated March 27, 2003), and in other filings with the Securities
and Exchange Commission.
MSX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
for he fiscal quarters ended March 30, 2003 and March 31, 2002
FISCAL QUARTER ENDED
---------------------------------------
MARCH 30, MARCH 31,
2003 2002
---------------- ----------------
(in thousands)
Net sales $ 183,351 $ 205,473
Cost of sales 163,174 178,820
--------- ---------
Gross profit 20,177 26,653
Selling, general and administrative expenses 15,704 19,865
Restructuring and severance costs 1,431 278
--------- ---------
Operating income 3,042 6,510
Interest expense, net 6,675 6,261
--------- ---------
Income (loss) before income taxes, minority
interests and equity in Affiliates (3,633) 249
Income tax provision 101 101
Less minority interests and equity in
affiliates, net of taxes (174) 238
--------- ---------
Loss before cumulative effect of accounting
change for goodwill impairment (3,560) (90)
Cumulative effect of accounting change for goodwill
impairment, net of taxes of $9,745 - (38,102)
--------- ---------
Net loss (3,560) (38,192)
Preferred stock dividends (2,194) (1,905)
--------- ---------
Net loss available to common shareholders $ (5,754) $ (40,097)
========= =========
MSX INTERNATIONAL, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
for the fiscal quarters ended
March 30, 2003 and March 31, 2002
FISCAL QUARTER ENDED
-------------------------------------
MARCH 30, 2003 MARCH 31, 2002
-------------- --------------
(in thousands)
RECONCILIATION OF EBITDA:
OPERATING INCOME $ 3,042 $ 6,510
Michigan Single Business and similar taxes 875 891
------- -------
EBIT, AS DEFINED 3,917 7,401
Depreciation 4,759 4,517
Severance costs 1,431 278
------- -------
EBITDA BEFORE SEVERANCE, AS DEFINED $10,107 $12,196
======= =======
CAPITAL EXPENDITURES $ 2,246 $ 2,030
AS OF
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SELECTED BALANCE SHEET DATA: MARCH 30, 2003 DECEMBER 29, 2002
-------------- -----------------
Cash and cash equivalents $ 3,886 $ 10,935
Accounts receivable, net 219,587 211,957
Notes payable and current portion of long-term debt 14,979 14,671
Long-term debt 237,029 220,003
-------- --------
Total debt $252,008 $234,674
======== ========
EBITDA is presented as additional information because management believes it to
be a useful indicator of the company's ability to meet debt service obligations
and capital expenditure requirements. It is not, however, intended as an
alternative measure of operating results or cash flow from operations (as
determined in accordance with generally accepted accounting principles).