EXHIBIT 99.1
THE KEITH COMPANIES|TKC
NEWS RELEASE FOR MAY 8, 2003 AT 7:30 AM EST
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Contact information:
THE KEITH COMPANIES, INC. FRB | WEBER SHANDWICK
19 Technology Drive Tricia Ross
Irvine, CA 92618 Investor Relations
(949) 923-6001 (310) 407-6540
(949) 923-6026 Fax
WWW.KEITHCO.COM
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Contact: Aram Keith,
CEO & Chairman of the Board
THE KEITH COMPANIES REPORTS RESULTS
FOR QUARTER ENDED MARCH 31, 2003
IRVINE, CA (May 8, 2003) ... The Keith Companies, Inc. (Nasdaq: TKCI), an
engineering and consulting services firm, today announced financial results for
the quarter ended March 31, 2003.
Net revenue for the three months ended March 31, 2003 increased 7% to $22.3
million, while income from continuing operations for the same period decreased
to $1.4 million and resulted in diluted earnings per share from continuing
operations of $0.18. This compares to net revenue for the first quarter of 2002
of $20.8 million with income from continuing operations of $1.5 million and
diluted earnings per share from continuing operations of $0.20. Excluding the
net revenue of ALNM Group, Inc. for January and February of 2003 (the Company
acquired ALNM Group, Inc. effective March 1, 2002), the Company experienced
internal net revenue growth of 0.8% for the first quarter of 2003 over the first
quarter of 2002.
"Demand in the real estate industry for our services remained very strong
as we posted a 15.5 % internal growth rate in net revenue in the first quarter
of 2003 versus 2002," said Aram Keith, Chairman and CEO of The Keith Companies,
Inc. "The stability we feel in this area is reinforced by the level of new
contract activity that is occurring. During February and March of 2003, our
Riverside County, California offices alone entered into contracts valued at over
$3.5 million for new master planned community work. Likewise, several of our
other real estate services-related offices, mainly in California, continue to
see robust demand. This growth in net revenue, however, was offset by weakness
in our industrial/energy segment, as many of these clients have deferred capital
spending plans until industry conditions improve. We have scaled back our
resources in this area to a level commensurate with the demand we are now
seeing."
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FINANCIAL POSITION
The Company's March 31, 2003 balance sheet remains strong with cash and
securities of $24.2 million, a current ratio of 4.19:1, a debt to equity ratio
of 0.00:1 and shareholders' equity of $65.0 million or $8.65 per common share
outstanding at March 31, 2003.
FINANCIAL GUIDANCE
In adherence with the U.S. Securities and Exchange Commission's (SEC)
Regulation Fair Disclosure, The Keith Companies provides the following guidance
for all investors and encourages all current and potential investors to review
the Disclosure Regarding Forward-Looking Statements in this press release as
well as all financial documents filed with the SEC. All guidance amounts are
before special items, if any, and exclude the impact of any potential future
acquisitions.
The Company is revising its financial guidance for 2003. For the full year,
the Company now estimates net revenue to range from $93.0 million to $100.0
million, and forecasts diluted earnings per share to range from $0.85 to $1.00
based upon an estimated 8.0 million weighted average number of diluted shares
outstanding. Broken out by quarters, the Company expects the following ranges
for diluted earnings per share: $0.19 to $0.24 for the second quarter; $0.27 to
$0.32 for the third quarter; and $0.21 to $0.26 for the fourth quarter.
"We anticipate that the weakness in our industrial/energy segment will
continue at least through the remainder of the year," said Keith. "In terms of
growth from first quarter 2002 to first quarter 2003, net revenue from our real
estate services exceeded our expectations. It continues to be a source of
strength and stability for the Company. Our major residential real estate
clients continue to acquire new land for development, which is providing a
growing pipeline of work in this area.
"Our balance sheet remains exceptionally strong, with more than $24 million
in cash and securities and virtually no debt. This gives us the financial
flexibility to continue implementing our acquisition strategy. We will continue
to remain extremely thorough in our due diligence and will move on acquisition
opportunities when we are confident that they should generate profitable
long-term growth for our shareholders," said Keith.
CONFERENCE CALL TO BE BROADCAST LIVE OVER THE INTERNET
The Company will be hosting an earnings conference call, which will be
broadcast live over the Internet at 8:30 a.m. Pacific Time on May 8, 2003 and
can be accessed by all interested parties at HTTP://WWW.VIAVID.COM . To listen
to the live call, please go to the Web site at least fifteen minutes prior to
the start of the call to register, download, and install any necessary audio
software. For those unable to participate during the live broadcast, a replay
will be available shortly after the call. A copy of the Company's press release
announcing its earnings and any other financial and statistical information
about the period to be presented in the conference call will be available at
this section of the Company's website entitled "Investor Relations" at
WWW.KEITHCO.COM.
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ABOUT THE KEITH COMPANIES
The Keith Companies, Inc. is a fully integrated, multi-disciplined
engineering and consulting services company, with offices located throughout the
Western and Midwestern United States. The Keith Companies' professionals provide
a wide spectrum of skilled resources including land planning, engineering,
surveying, mapping, environmental studies, and water and cultural resources that
are needed to effectively plan, engineer, and design state-of-the-art private
and public facilities. Additionally, the Company provides mechanical,
electrical, chemical, power/energy engineering, and other industrial engineering
services to design and improve the efficiency and reliability of automated and
manufacturing processes, production lines, and fire protection systems. The
Keith Companies benefits from a diverse public and private client base varying
from residential and commercial real estate projects to institutional,
manufacturing, and processing facilities. For more information visit the
Company's website at WWW.KEITHCO.COM.
Certain statements in this news release may include forward-looking
statements that express our expectation, prediction, belief, or projection.
These statements involve known and unknown risks, uncertainties, and other
factors that may cause the actual results, performance, and achievement of The
Keith Companies to be materially and adversely different from any future
results, performance, or achievement expressed or implied by these
forward-looking statements. Factors that may cause actual results to differ from
the forward-looking statements contained in this release and that may affect the
Company's prospects in general include, but are not limited to: changes in the
economic growth in the United States (especially in California) and other major
international economies (especially Brazil), our ability to sustain our growth
and profitability, our ability to implement our acquisition strategy and to
successfully close and integrate acquired companies on a timely and
cost-effective basis, changes in the carrying value of our goodwill and other
long-term assets, our failure to accurately estimate costs on fixed-price
contracts or contracts with not-to-exceed provisions, the uncertain timing of
awards and contracts, the ability to maintain acquired companies' profit margins
and/or client base, outcomes of pending and future litigation, the ongoing
financing of public works and infrastructure enhancements and refurbishment, our
ability to attract and retain employees, the demand for electricity and the
impact on power providers' plans for expanding generation facilities, increasing
competition by foreign and domestic companies, a downturn in the real estate
market, risks inherent in doing business outside the United States, including
the difficulty of enforcing contracts, political instability and foreign
currency fluctuations and potential exchange restrictions, the short- and
long-term impact of terrorist activities and resulting political and military
policies, and other factors as are described in the Company's filings with the
Securities and Exchange Commission. The forward-looking information set forth in
this press release is as of the date indicated above and we undertake no duty to
update this information.
TABLES FOLLOW
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED
MARCH 31,
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2003 2002
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(UNAUDITED)
Gross revenue $ 24,651,000 $ 25,267,000
Subcontractor costs 2,305,000 4,464,000
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Net revenue 22,346,000 20,803,000
Costs of revenue 14,942,000 13,692,000
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Gross profit 7,404,000 7,111,000
Selling, general and administrative expenses 5,387,000 4,646,000
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Income from operations 2,017,000 2,465,000
Interest income 69,000 124,000
Interest expense 6,000 36,000
Other (income) expenses, net (212,000) 20,000
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Income before provision for income taxes and
discountinued operations 2,292,000 2,533,000
Provision for income taxes 894,000 989,000
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Income from continuing operations 1,398,000 1,544,000
Loss from discontinued operations, net of income
taxes -- 105,000
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Net income $ 1,398,000 $ 1,439,000
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Earnings per share from continuing operations:
Basic $ 0.18 $ 0.21
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Diluted $ 0.18 $ 0.20
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Earnings (loss) per share from discontinued
operations, net of income taxes:
Basic $ -- $ (0.01)
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Diluted $ -- $ (0.01)
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Earnings per share:
Basic $ 0.18 $ 0.20
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Diluted $ 0.18 $ 0.19
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Weighted average number of shares outstanding:
Basic 7,588,601 7,310,790
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Diluted 7,948,933 7,755,839
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2003 2002
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(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 17,763,000 $ 20,333,000
Securities held-to-maturity 6,456,000 3,164,000
Contracts and trade receivables, net 16,295,000 18,771,000
Costs and estimated earnings in excess of billings 11,405,000 10,392,000
Prepaid expenses and other current assets 2,347,000 1,367,000
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Total current assets 54,266,000 54,027,000
Equipment and leasehold improvements, net 4,690,000 4,831,000
Goodwill, net 23,141,000 23,056,000
Other assets 216,000 312,000
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Total assets $ 82,313,000 $ 82,226,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations $ 9,000 $ 52,000
Trade accounts payable 1,526,000 1,818,000
Accrued employee compensation 3,918,000 3,722,000
Current portion of deferred tax liabilities 3,065,000 3,065,000
Other accrued liabilities 3,282,000 4,484,000
Billings in excess of costs and estimated earnings 1,157,000 1,273,000
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Total current liabilities 12,957,000 14,414,000
Capital lease obligations, less current portion 8,000 18,000
Issuable common stock 2,215,000 2,215,000
Deferred tax liabilities 1,675,000 1,675,000
Accrued rent 421,000 292,000
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Total liabilities 17,276,000 18,614,000
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Shareholders' equity:
Preferred stock -- --
Common stock 8,000 8,000
Additional paid-in-capital 44,193,000 44,166,000
Retained earnings 20,836,000 19,438,000
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Total shareholders' equity 65,037,000 63,612,000
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Total liabilities and shareholders' equity $ 82,313,000 $ 82,226,000
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THE KEITH COMPANIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 31,
--------------------------------
2003 2002
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(UNAUDITED)
Cash flows from operating activities:
Net income $ 1,398,000 $ 1,439,000
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 593,000 539,000
Loss on sale of equipment 16,000 10,000
Changes in operating assets and liabilities, net of
effects from acquisitions:
Contracts and trade receivables, net 2,476,000 3,725,000
Costs and estimated earnings in excess of billings (1,060,000) (1,389,000)
Prepaid expenses and other assets (926,000) (263,000)
Trade accounts payable and accrued liabilities (1,166,000) 496,000
Billings in excess of costs and estimated earnings (116,000) (176,000)
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Net cash provided by operating activities $ 1,215,000 $ 4,381,000
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Cash flows from investing activities:
Net cash expended for acquisition -- (7,297,000)
Additions to equipment and leasehold improvements (498,000) (349,000)
Proceeds from (purchase of) securities held-to-maturity (3,292,000) 3,289,000
Proceeds from sales of equipment 31,000 61,000
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Net cash used in investing activities $ (3,759,000) $ (4,296,000)
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Cash flow from financing activities:
Principal payments on long-term debt and capital lease
obligations, including current portion (53,000) (137,000)
Proceeds from exercise of stock options 27,000 12,000
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Net cash used in financing activities $ (26,000) $ (125,000)
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Net decrease in cash and cash equivalents (2,570,000) (40,000)
Cash and cash equivalents, beginning of period $ 20,333,000 $ 12,212,000
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Cash and cash equivalents, end of period $ 17,763,000 $ 12,172,000
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