Pike Electric Reports Fourth Quarter and Full Fiscal Year 2007 Results
-- Fiscal fourth quarter EPS increases 89% to $0.17 --
-- Gross margins increase 320 basis points to 17.8% in the fourth quarter --
-- Debt reduced by $23 million in the quarter --
MT. AIRY, N.C., Aug. 28 /PRNewswire-FirstCall/ -- Pike Electric
Corporation (NYSE: PEC) today announced the results for its fiscal fourth
quarter and year ended June 30, 2007.
Fiscal 2007 Fourth Quarter Results
Total revenues for the fourth quarter of fiscal 2007 were $144.3 million,
compared to $156.1 million in the fourth quarter of fiscal 2006. Core powerline
revenues for the fourth quarter of fiscal 2007 were $136.6 million, as compared
to $145.8 million for the fourth quarter of fiscal 2006. Core powerline revenue
per billable hour increased approximately 6% year over year, reflecting more
favorable pricing from contract renegotiations and elimination of certain
unprofitable accounts. Core powerline billable hours decreased approximately 13%
year over year in the quarter due primarily to reduced headcount from recent
efforts to exit certain contracts and the negative impact of wet weather in
parts of the South. Storm restoration revenues totaled $7.7 million for the
fourth quarter of fiscal 2007, compared to $10.3 million for the fourth quarter
of fiscal 2006.
Gross profit for the fourth quarter of fiscal 2007 was $25.6 million, or
17.8% of revenue, as compared to $22.8 million, or 14.6% revenue, for the fourth
quarter of fiscal 2006. The improvement in gross margin of approximately 320
basis points year over year was primarily due to the successful elimination of
certain low margin accounts, the negotiation of more favorable pricing on
contracts and an improved self-insurance claim experience.
General and administrative expenses for the fourth quarter of fiscal 2007
were $11.8 million, or 8.2% of revenue, an 11.0% decrease from $13.2 million, or
8.5% of revenue, for the fourth quarter of fiscal 2006. This decrease in general
and administrative expenses reflects a reduction in legal expenses, partially
offset by higher consulting fees related to recent investments in IT
infrastructure. Interest expense decreased 8.4% to $4.5 million compared to the
fourth quarter of 2006 primarily due to lower debt balances.
Net income for the fourth quarter of fiscal 2007 totaled $5.6 million, or
$0.17 per diluted share, compared to net income of approximately $3.0 million,
or $0.09 per diluted share, for the fourth quarter of fiscal 2006.
As of June 30, 2007, Pike Electric's cash and cash equivalent balance was
$1.5 million versus $3.4 million at June 30, 2006. The Company has reduced total
debt by $23.0 million to $191.5 million during the fourth quarter and by $62.0
million since June 30, 2006.
"We are very pleased with the progress we made this quarter," stated J.
Eric Pike, Chairman and Chief Executive Officer of Pike Electric. "We not only
reported solid improvement in gross margins year over year, we continued to
maintain margins on a sequential basis in the fourth quarter, despite a
significantly lower contribution from storm restoration revenues. As part of our
previously communicated strategy, we continued to enhance our profitability by
renegotiating or exiting certain lower-margin contracts as well as improving
utilization and efficiency. This improvement was somewhat offset by unfavorable
wet weather conditions in some of our key markets. I am confident that our focus
on improving utilization, contract profitability, enhanced IT systems and debt
reduction initiatives, positions us well to capitalize on strong industry
fundamentals and consistently grow our core business over the long-term."
Fiscal 2007 Full Year Results
Total revenues for the fiscal year ended June 30, 2007 were $596.8
million, as compared to $727.5 million for fiscal year 2006. Core powerline
revenues for fiscal 2007 were $543.6 million, as compared to $542.2 million for
fiscal 2006, as an approximate 4% increase in core powerline revenue per
billable hour more than offset the approximate 3% decline in core powerline
billable hours. Storm restoration revenues totaled $53.2 million for fiscal
2007, a decrease of 71% from $185.3 million in fiscal 2006, as prior year
revenues benefited from repair and maintenance work following Hurricanes Dennis,
Katrina, Rita and Wilma. Net income for the fiscal year ended June 30, 2007
totaled $18.4 million, or $0.55 per diluted share, compared to net income of
$34.4 million, or $1.07 per diluted share, for fiscal 2006.
Outlook
Based on current customer contracts and business conditions, for its
fiscal year 2008, the Company expects core powerline revenues to range from $550
million to $560 million. The Company expects total gross profit margins to be in
the range of 16% to 17% and general and administrative expenses to be in a range
of 7% to 8% of revenues. This guidance assumes storm restoration revenues of
approximately $50 million to $70 million for fiscal 2008. Any significant
variations in storm restoration revenues may result in year-to-year fluctuations
in core powerline revenue growth.
Conference Call
Pike Electric will host a conference call today to discuss financial
results for its fiscal fourth quarter and year ended June 30, 2007 at 5:00 p.m.
EDT on August 28, 2007. This call is being web cast and can be accessed by
visiting the Investor Relations section of our website at www.pike.com. The call
can also be accessed live over the phone by dialing (800) 811-8824, or for
international callers, (913) 981-4903. A replay will be available shortly after
the call and can be accessed by dialing (888) 203-1112, or for international
callers, (719) 457-0820. The passcode is 7485156. The replay will be available
until September 4, 2007.
About Pike Electric
Pike Electric is one of the largest providers of outsourced electric
distribution and transmission services in the United States. Its core activities
consist of the maintenance, upgrade and extension of electric distribution and
sub-500 kilovolt transmission powerlines for more than 150 electric utilities,
cooperatives and municipalities. Pike Electric services a contiguous 19-state
region that stretches from Pennsylvania in the north to Florida in the southeast
and Texas in the southwest and is a recognized leader in storm restoration
services. The Company's common stock is traded on the New York Stock Exchange
under the symbol PEC. For further information regarding Pike Electric, visit the
Company's website at www.pike.com.
Safe Harbor
This press release contains forward-looking statements that relate to Pike
Electric's plans, objectives and estimate, and include those in the "Outlook"
section above. These statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995 and speak only as of the
date of this release. The terms "should," "believe," "plan," "expect,"
"anticipate," "estimate," "intend" and "project" and similar words or
expressions are intended to identify forward-looking statements. Various risks,
uncertainties and other factors could cause actual results to differ materially
from those expressed in any forward-looking statements For a more detailed list
of such risks, uncertainties and factors, please refer to the Risk Factor
section of Pike Electric's Annual Report on Form 10-K for the fiscal year ending
June 30, 2006 and in its other filings with the Securities and Exchange
Commission. Pike Electric makes no commitment to update any forward-looking
statement or to disclose any facts, events, or circumstances after the date of
this release that may affect the accuracy of any forward-looking statement,
except as may be required by applicable law.
PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
June 30 June 30
2007 2006
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,467 $ 3,391
Accounts receivable, net 59,603 66,629
Work completed not billed 44,527 56,430
Inventories 8,535 8,041
Prepaid expenses and other 6,219 5,928
Deferred income taxes 13,633 12,460
Total current assets 133,984 152,879
Property and equipment, net 267,740 284,452
Goodwill 94,402 94,402
Other intangibles, net 43,228 49,978
Deferred loan costs, net 4,482 6,265
Other assets 1,661 1,990
Total assets $ 545,497 $ 589,966
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,503 $ 9,706
Accrued compensation 20,597 24,954
Accrued expenses and other 4,447 5,186
Income taxes payable 6,146 57
Current portion deferred compensation 3,544 10,614
Current portion of insurance and
claim accruals 26,669 18,867
Revolving credit facility -- 4,500
Total current liabilities 69,906 73,884
Long-term debt, net of current portion 191,500 249,000
Insurance and claim accruals, net of
current portion 10,894 13,439
Deferred compensation, net of current portion 9,315 10,378
Deferred income taxes 67,259 72,333
Other liabilities 562 200
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001 per share;
100,000 shares authorized; no shares
issued and outstanding -- --
Common stock, par value $0.001 per share;
100,000 shares authorized; 32,916 and
32,577 shares issued and outstanding
at June 30, 2007 and 2006, respectively 6,426 6,426
Additional paid-in capital 142,849 135,869
Accumulated other comprehensive
income (loss) (8) --
Retained earnings 46,794 28,437
Total stockholders' equity 196,061 170,732
Total liabilities and stockholders' equity $ 545,497 $ 589,966
PIKE ELECTRIC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share amounts)
Three months ended Twelve months ended
June 30, June 30,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited)
Revenues $ 144,340 $ 156,112 $ 596,837 $ 727,470
Cost of operations 118,699 133,278 499,422 599,247
Gross profit 25,641 22,834 97,415 128,223
General and administrative
expenses 11,780 13,244 46,486 45,228
Loss on sale of property and
equipment 204 345 1,052 2,250
Income from operations 13,657 9,245 49,877 80,745
Other expense (income):
Interest expense 4,523 4,936 19,799 24,272
Other, net (37) (59) (236) (220)
Total other expense 4,486 4,877 19,563 24,052
Income before income taxes 9,171 4,368 30,314 56,693
Income tax expense 3,600 1,373 11,957 22,324
Net income $ 5,571 $ 2,995 $ 18,357 $ 34,369
Earnings per share:
Basic $ 0.17 $ 0.09 $ 0.57 $ 1.11
Diluted $ 0.17 $ 0.09 $ 0.55 $ 1.07
Shares used in computing earnings
per share:
Basic 32,588 32,097 32,416 31,023
Diluted 33,604 33,243 33,366 32,252