Exhibit 99.1
BAKER REPORTS REVENUE AND EPS GAINS FOR FOURTH QUARTER AND YEAR 2004
PITTSBURGH, March 8 /PRNewswire-FirstCall/ -- Michael Baker Corporation
(Amex: BKR) today reported substantial increases in total contract revenues and
earnings per share for both the fourth quarter and full year of 2004 compared to
the same period in 2003.
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For the full year, the company achieved net income of $12.3 million, or
$1.44 per diluted common share, on total contract revenues of $551 million,
compared with net income of $2.1 million, or $0.25 per diluted common share, on
total contract revenues of $426 million in 2003. Income from operations in 2004
was $21.4 million, compared to $6.4 million in year 2003. The significant
increase in the year-over-year financial results is attributable primarily to
strong revenue and operating performances in the Engineering segment, higher
utilization rates in the Engineering segment, lower insurance- related costs,
and several other favorable, one-time adjustments. A significant portion of
Engineering's improvement resulted from the addition of the five-year flood map
modernization program management contract with the Federal Emergency Management
Agency (FEMA). Work on certain elements of this contract is currently
experiencing delays, which is adversely impacting the company's ability to
achieve performance-based incentives. The 2003 financial results were adversely
impacted by the overall mix of project work and a number of administrative and
operating-related costs that were not present in 2004.
The company's Engineering and Energy business segments' total contract
revenues for 2004 were $343.4 million and $207.4 million, respectively, compared
with the $250.6 million and $175.4 million reported in 2003. Operating income
before corporate overhead allocations in the Engineering segment increased 82
percent compared to the prior year, while operating income before corporate
overhead in the Energy business increased 13 percent relative to 2003. The major
factor in Engineering's operating income before corporate overhead improvement
was the higher labor utilization rates that the segment experienced throughout
the year. Energy's operating income improvement was the result of higher Managed
Services revenues compared to 2003 and lower insurance and benefit-related
costs. Operating income before corporate overhead allocations expressed as a
percentage of segment revenues were 9.5 percent for Engineering and 2.9 percent
for Energy in 2004, compared to 7.1 percent and 3.0 percent, respectively, in
2003.
Net interest expense for 2004 was ($0.1 million) compared to net interest
expense of ($0.8 million) in 2003. At December 31, 2004 the company had no
long-term debt, compared to long-term debt of $13.5 million at December 31,
2003. Net other income in 2004, which includes equity earnings from the
company's Stanley Baker Hill joint venture, was $1.5 million, compared to a net
other expense of ($0.7 million) in 2003.
Total backlog for the Engineering and Energy businesses at year-end 2004 was
$1.5 billion, compared to $0.7 billion at year-end 2003. The year-over- year
increase is attributable primarily to the addition of the FEMA contract, the
addition of one offshore Managed Service contract with Anglo-Suisse Offshore
Partners, and the addition of several international contracts in the Energy
segment during 2004.
In fourth quarter 2004, the company recorded net income of $2.3 million, or
$0.27 per diluted common share, on total contract revenues of $154 million,
compared with net income of $0.9 million, or $0.11 per diluted common share, on
total contract revenues of $116 million for fourth quarter 2003.
Commenting on these financial results, President and Chief Executive Officer
Donald P. Fusilli, Jr., said: "2004 was an exceptional year for Baker. It
provides evidence that our steady commitment to our overall strategy, while
still early in its evolution, can produce this level of results, which will
become our expectation in the years ahead." He added that, "Baker enters 2005
with a certain degree of caution. Even though we believe a reauthorization of
TEA-21 will occur in mid-year, we do not expect that it will have any measurable
impact on this year. Moreover, the President's commitment to reduce the budget
deficit may put downward pressure on some Federal programs, including the FEMA
contract. But," he concluded, "the continuing high commodity price for oil and
gas is presenting many new opportunities for Baker in both the domestic and
international marketplaces."
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 4,300 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)
Fourth Quarter Operating Results
- --------------------------------
(In thousands, except earnings per share)
2004 2003
------------ ------------
Total contract revenues $ 154,492 $ 115,548
Gross profit $ 19,271 $ 16,357
Income from operations $ 3,916 $ 2,645
Income before taxes $ 4,639 $ 2,469
Net income $ 2,305 $ 890
Weighted average shares outstanding:
Basic 8,472 8,320
Diluted 8,658 8,410
Net income per share:
Basic $ 0.27 $ 0.11
Diluted $ 0.27 $ 0.11
============ ============
Twelve Month Operating Results
- ------------------------------
(In thousands, except earnings per share)
2004 2003
------------ ------------
Total contract revenues $ 550,751 $ 425,983
Gross profit $ 86,188 $ 61,104
Income from operations $ 21,428 $ 6,361
Income before taxes $ 22,796 $ 4,920
Net income $ 12,292 $ 2,066
Weighted average shares outstanding:
Basic 8,402 8,324
Diluted 8,554 8,403
Net income per share:
Basic $ 1.46 $ 0.25
Diluted $ 1.44 $ 0.25
============ ============
Segment results
- ---------------
For the quarter For the year
ended December 31 ended December 31
--------------------- ---------------------
(In millions) 2004 2003 2004 2003
- ---------------------------------------- --------- --------- --------- ---------
Engineering
- -----------
Revenues $ 101.3 $ 67.6 $ 343.4 $ 250.6
Income from operations before
Corporate overhead 9.2 6.9 32.5 17.9
Less: Corporate overhead (2.8) (2.8) (11.3) (11.5)
--------- --------- --------- ---------
Income from operations 6.4 4.1 21.2 6.4
--------- --------- --------- ---------
Energy
- ------
Revenues 53.2 47.9 207.4 175.4
Income from operations before
Corporate overhead (0.9) (0.1) 6.0 5.3
Less: Corporate overhead (1.2) (1.0) (4.7) (4.0)
--------- --------- --------- ---------
Income from operations (2.1) (1.1) 1.3 1.3
--------- --------- --------- ---------
Non-Core
- --------
Revenues - - - -
Income from operations before
Corporate overhead - (0.2) 0.1 0.1
Less: Corporate overhead - - - -
--------- --------- --------- ---------
Income from operations - (0.2) 0.1 0.1
--------- --------- --------- ---------
Total Reportable Segments
- -------------------------
Revenues 154.5 115.5 550.8 426.0
Income from operations before
Corporate overhead 8.3 6.6 38.6 23.3
Less: Corporate overhead (4.0) (3.8) (16.0) (15.5)
--------- --------- --------- ---------
Income from operations 4.3 2.8 22.6 7.8
--------- --------- --------- ---------
Other Corporate/Insurance expense (0.4) (0.2) (1.2) (1.4)
--------- --------- --------- ---------
Total Company - Income from
operations $ 3.9 $ 2.6 $ 21.4 $ 6.4
========= ========= ========= =========
Backlog
- -------
(In millions) At 12/31/04 At 12/31/03
- ---------------------------------------- ------------ ------------
Total $ 1,451.7 $ 720.7
============ ============
Condensed Balance Sheet
- -----------------------
(In thousands) At 12/31/04 At 12/31/03
- ---------------------------------------- ------------ ------------
ASSETS
Cash and cash equivalents $ 15,471 $ 9,126
Receivables, net 79,559 74,940
Unbilled revenues 71,280 51,620
Prepaid expenses and other 12,941 9,899
------------ ------------
Total current assets 179,251 145,585
Property, plant and equipment, net 17,879 17,402
Goodwill and other intangible
assets, net 8,947 9,233
Other assets 5,667 7,205
------------ ------------
Total assets $ 211,744 $ 179,425
============ ============
LIABILITIES & SHAREHOLDERS'
INVESTMENT
Accounts payable $ 48,326 $ 28,131
Accrued compensation and insurance 36,458 25,618
Other accrued expenses 24,629 20,464
Billings in excess of revenues 9,705 16,611
------------ ------------
Total current liabilities 119,118 90,824
Long-term debt - 13,481
Other liabilities 6,094 2,539
------------ ------------
Total liabilities 125,212 106,844
------------ ------------
Common Stock 8,910 8,711
Additional paid-in capital 40,000 38,298
Retained earnings 41,769 29,477
Other comprehensive loss (1,129) (912)
Unearned compensation expense (65) (40)
Less - Treasury shares (2,953) (2,953)
------------ ------------
Total shareholders' investment 86,532 72,581
------------ ------------
Total liabilities &
shareholders' investment $ 211,744 $ 179,425
============ ============
SOURCE Michael Baker Corporation
- -0- 03/08/2005
/CONTACT: David Higie of Michael Baker Corporation, +1-412-269-6449/
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