EXHIBIT 99.1
GRAPHICS OMITTED
FOR IMMEDIATE RELEASE
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
- ---------------
Contact: Aram Keith,
CEO & Chairman of the Board
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS AND STRONG
INTERNAL GROWTH IN REAL ESTATE SERVICES
IRVINE, CA (August 7, 2003)...The Keith Companies, Inc. (Nasdaq: TKCI), an
engineering and consulting services firm, today announced financial results for
the second quarter ended June 30, 2003.
Net revenue for the three months ended June 30, 2003 decreased 3.7% to
$22.8 million, while income from continuing operations for the same period
decreased to $1.7 million and resulted in diluted earnings per share from
continuing operations of $0.22. This compares to net revenue for the second
quarter of 2002 of $23.7 million with income from continuing operations of $2.1
million and diluted earnings per share from continuing operations of $0.26.
"Even though our results were lower than the prior year," said Aram Keith,
Chairman and CEO of The Keith Companies, Inc., "the current quarter results for
both net revenue and diluted earnings per share were in line with our
expectations. These decreases from the prior year were mainly due to the
continued weakness in the industrial/energy segment. We still believe that this
segment will be an important long term growth vehicle for us."
Net revenue for the six months ended June 30, 2003 increased 1.5% to $45.1
million, from $44.5 million for the six months ended June 30, 2002. This
increase was primarily due to increased net revenue derived from real estate
services and additional net revenue generated from the acquisition of ALNM
Group, Inc. (the Company acquired ALNM Group, Inc. effective March 1, 2002).
These increases were partially offset by lower net revenue from our
industrial/energy segment. Income from continuing operations for the six months
ended June 30, 2003 decreased to $3.1 million, and resulted in diluted earnings
per share from continuing operations of $0.39 compared to $3.6 million or
diluted earnings per share from continuing operations of $0.46 for the six
months ended June 30, 2002.
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
Page 2 of 6
"We continue to see strong demand for our services in the residential
real estate market," said Keith. "For the quarter and six months ended, this
area of our business posted an 8.8% and 12.0% internal growth in net revenue
from the prior year, respectively, with strength in both the Northern and
Southern California markets. We are seeing a good mix of real estate projects
from new master planned communities that are in the process of being planned,
designed and constructed, and from more mature communities that now require the
development of schools, community centers and other ancillary facilities."
FINANCIAL POSITION
The Company's June 30, 2003 balance sheet remains strong with cash and
securities of $27.0 million, a current ratio of 4.50:1, a debt to equity ratio
of 0.00:1 (excluding issuable common stock) and shareholders' equity of $67.6
million or $8.87 per common share outstanding at June 30, 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's financial guidance for diluted earnings per share for the
third and fourth quarters of 2003 remains unchanged from the guidance previously
provided. For the full year, the Company estimates net revenue to range from
$90.0 million to $97.0 million, and forecasts diluted earnings per share to
range from $0.87 to $0.97 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: $0.27 to $0.32 for
the third quarter; and $0.21 to $0.26 for the fourth quarter.
"We have a strong pipeline of work from our residential real estate
clients, which gives us comfort on the second half of 2003," said Keith. "Our
homebuilding clients see good opportunities to continue growing their business,
and we are well positioned to continue benefiting from their expansion efforts."
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 August 7, 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.
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
Page 3 of 6
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
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Gross revenue $25,093,000 $28,477,000 $49,745,000 $53,744,000
Subcontractor costs 2,316,000 4,826,000 4,622,000 9,290,000
------------ ------------ ------------ ------------
Net revenue 22,777,000 23,651,000 45,123,000 44,454,000
Costs of revenue 14,989,000 15,636,000 29,930,000 29,328,000
------------ ------------ ------------ ------------
Gross profit 7,788,000 8,015,000 15,193,000 15,126,000
Selling, general and administrative 5,028,000 4,663,000 10,415,000 9,309,000
------------ ------------ ------------ ------------
Income from operations 2,760,000 3,352,000 4,778,000 5,817,000
Interest income 70,000 93,000 139,000 217,000
Interest expense 3,000 30,000 9,000 66,000
Other (income) expenses, net (8,000) 20,000 (220,000) 40,000
------------ ------------ ------------ ------------
Income before provision for income
taxes and discountinued operations 2,835,000 3,395,000 5,128,000 5,928,000
Provision for income taxes 1,106,000 1,324,000 2,000,000 2,313,000
------------ ------------ ------------ ------------
Income from continuing operations 1,729,000 2,071,000 3,128,000 3,615,000
Loss from discontinued operations, net
of income taxes
-- 193,000 -- 298,000
------------ ------------ ------------ ------------
Net income $ 1,729,000 $1,878,000 $ 3,128,000 $ 3,317,000
============ ============ ============ ============
Earnings per share from continuing operations:
Basic $ 0.23 $ 0.28 $ 0.41 $ 0.49
============ ============ ============ ============
Diluted $ 0.22 $ 0.26 $ 0.39 $ 0.46
============ ============ ============ ============
Loss per share from discontinued operations, net of income taxes:
Basic
$ -- $ (.02) $ -- $ (.04)
============ ============ ============ ============
Diluted $ -- $ (.02) $ -- $ (.04)
============ ============ ============ ============
Earnings per share:
Basic $ 0.23 $ 0.26 $ 0.41 $ 0.45
============ ============ ============ ============
Diluted $ 0.22 $ 0.24 $ 0.39 $ 0.42
============ ============ ============ ============
Weighted average number of shares outstanding:
Basic 7,607,374 7,323,154 7,598,040 7,317,007
============ ============ ============ ============
Diluted 7,940,262 7,922,811 7,944,650 7,839,360
============ ============ ============ ============
MORE-MORE-MORE
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2003 2002
----------------- -----------------
(UNAUDITED)
Assets
Current assets:
Cash and cash equivalents $ 20,669,000 $ 20,333,000
Securities held-to-maturity 6,348,000 3,164,000
Contracts and trade receivables, net 15,971,000 18,771,000
Costs and estimated earnings in excess of billings 11,274,000 10,392,000
Prepaid expenses and other current assets 1,568,000 1,367,000
----------------- -----------------
Total current assets 55,830,000 54,027,000
Equipment and leasehold improvements, net 4,383,000 4,831,000
Goodwill, net 23,210,000 23,056,000
Other assets 217,000 312,000
----------------- -----------------
Total assets $ 83,640,000 $ 82,226,000
================= =================
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of capital lease obligations $ -- $ 52,000
Trade accounts payable 1,322,000 1,818,000
Accrued employee compensation 4,631,000 3,722,000
Current portion of deferred tax liabilities 3,058,000 3,065,000
Other accrued liabilities 2,193,000 4,484,000
Billings in excess of costs and estimated earnings 1,210,000 1,273,000
----------------- -----------------
Total current liabilities 12,414,000 14,414,000
Capital lease obligations, less current portion -- 18,000
Issuable common stock 1,500,000 2,215,000
Deferred tax liabilities 1,675,000 1,675,000
Accrued rent 431,000 292,000
----------------- -----------------
Total liabilities 16,020,000 18,614,000
----------------- -----------------
Shareholders' equity:
Preferred stock -- --
Common stock 8,000 8,000
Additional paid-in-capital 45,046,000 44,166,000
Retained earnings 22,566,000 19,438,000
----------------- -----------------
Total shareholders' equity 67,620,000 63,612,000
----------------- -----------------
Total liabilities and shareholders' equity $ 83,640,000 $ 82,226,000
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MORE-MORE-MORE
THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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THE KEITH COMPANIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30,
-------------------------------------
2003 2002
----------------- -----------------
Cash flows from operating activities:
Net income $ 3,128,000 $ 3,317,000
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,159,000 1,116,000
Loss on sale of equipment 21,000 25,000
Tax benefit from exercise of stock options 19,000 --
Changes in operating assets and liabilities, net of
effects from acquisitions:
Contracts and trade receivables, net 2,800,000 1,892,000
Costs and estimated earnings in excess of billings (973,000) (3,205,000)
Prepaid expenses and other assets (180,000) 136,000
Trade accounts payable and accrued liabilities (1,043,000) 814,000
Billings in excess of costs and estimated earnings (63,000) (403,000)
----------------- -----------------
Net cash provided by operating activities $ 4,868,000 $ 3,692,000
----------------- -----------------
Cash flows from investing activities:
Net cash expended related to or for acquisitions (714,000) (7,297,000)
Additions to equipment and leasehold improvements (764,000) (871,000)
Proceeds from (purchases of) securities held-to-maturity (3,184,000) 2,485,000
Proceeds from sales of equipment 36,000 113,000
----------------- -----------------
Net cash used in investing activities $ (4,626,000) $ (5,570,000)
----------------- -----------------
Cash flow from financing activities:
Principal payments on long-term debt and capital lease
obligations, including current portion (53,000) (316,000)
Proceeds from exercise of stock options 147,000 131,000
----------------- -----------------
Net cash provided by (used in) financing activities $ 94,000 $ (185,000)
----------------- -----------------
Net increase (decrease) in cash and cash equivalents 336,000 (2,063,000)
Cash and cash equivalents, beginning of period $ 20,333,000 $ 12,212,000
----------------- -----------------
Cash and cash equivalents, end of period $ 20,669,000 $ 10,149,000
================= =================
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