Exhibit 99.1
BAKER REPORTS REVENUE AND EPS GAINS FOR FIRST QUARTER OF 2005
PITTSBURGH, May 4 /PRNewswire-FirstCall/ -- Michael Baker Corporation (Amex:
BKR) today reported improved financial results for the first quarter of 2005
compared to the year-ago period.
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For the quarter, Baker posted net income of $3.5 million, or $0.40 per
diluted share, on total contract revenues of $144 million. This compares with
net income of $3.1 million, or $0.37 per diluted share, on total contract
revenues of $125 million in first-quarter 2004. The current quarter benefited
from the receipt of an incentive award related to the FEMA contract and a higher
revenue and operating performance in the Engineering segment, but was adversely
impacted by lower than anticipated volume and labor realization levels in one
part of the Energy segment. The 2004 first-quarter performance also benefited
from a strong performance in the Engineering segment, as well as lower insurance
and related costs and the sale of shares held of an insurance firm.
Revenues in the Engineering business were 25 percent greater than the same
period last year, largely the result of the FEMA contract. Operating income
before corporate overhead allocations increased 42 percent with the major factor
being the impact of the delayed $2.2 million FEMA incentive award for work
performed during the third quarter of 2004. This is the second award that the
company has received under the year-old FEMA contract. The first award was made
in December 2004 and covered work performed in the second quarter of last year.
Operating income before corporate overhead allocations expressed as a percentage
of Engineering segment revenues were 10.8 percent for first-quarter 2005,
compared to 9.5 percent in first-quarter 2004.
Revenues in the Energy business were virtually the same as the first quarter
of 2004 due to a significant decline in revenue from the Applied Technology
business, which involves primarily the development and implementation of
computerized maintenance management systems in client facilities. Excluding the
decrease associated with the Applied Technology business, the remainder of the
Energy segment reported a revenue gain of four percent. Operating income before
corporate overhead allocations also decreased substantially compared to
first-quarter 2004 due to the delay or cancellation of contracts in the Applied
Technology business. As a result, operating income before corporate overhead
allocations expressed as a percentage of segment revenues were less than one
percent for the current quarter 2005, an increase over the fourth quarter of
2004 but down from the 4.8 percent in the year-ago period.
The provision for income tax rate for the 2005 first quarter was 42 percent,
compared to 47 percent for the same period last year. The decrease in the tax
rate is attributable to lower estimated foreign taxes for 2005 and expected 2005
benefits from certain state tax net operating loss carry forwards.
Total backlog for the company was $1.42 billion at March 31, 2005, compared
to $1.40 billion at year-end 2004. The first-quarter 2005 backlog includes
approximately $644 million related to the FEMA contract.
Commenting on the results, President and Chief Executive Officer Donald P.
Fusilli, Jr., said, "Our Engineering business continues to perform well as a
result of our FEMA contract and the strength of our Federal sector initiative.
We are now beginning to recognize the benefits that our performance-based
contracting model can deliver. The performance of our Energy segment was
disappointing, but we have taken action to correct the situation and are
continuing to see a growing number of opportunities both domestically and
internationally as oil and gas companies are making significant capital
investments to meet the growing worldwide demand for energy and require high-
quality operations and maintenance services to assist in their efforts." He
added that the company is still in negotiations with FEMA over an extension of
the first-year task order and the task order for year two, and will not be in a
position to provide 2005 guidance until those negotiations are completed.
Michael Baker Corporation has scheduled a conference call and webcast for
Thursday, May 5, at 10:00 AM Eastern Daylight Time to discuss the quarterly
results. Please call 800-860-2442 at least 10 minutes prior to the start of the
call. To access the webcast, please visit the investor relations portion of
Baker's website at http://www.mbakercorp.com.
Michael Baker Corporation ( http://www.mbakercorp.com ) provides engineering
and operations and maintenance services for its clients' most complex challenges
worldwide. The firm's primary practice areas are aviation, environmental,
facilities, geospatial information technologies, linear utilities,
transportation, water/wastewater, and oil & gas. With more than 4,200 employees
in over 40 offices across the United States and internationally, Baker is
focused on providing services that span the complete life-cycle of
infrastructure and managed asset projects.
(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)
First Quarter Operating Results For the quarter ended March 31
- ---------------------------------------------- -------------------------------
(In thousands, except earnings per share) 2005 2004
- ---------------------------------------------- --------- ---------
Total contract revenues $ 143,963 $ 125,005
Gross profit $ 22,917 $ 20,941
Income from operations $ 5,723 $ 5,385
Income before taxes $ 5,959 $ 5,845
Net income $ 3,456 $ 3,098
Weighted average shares outstanding:
Basic 8,524 8,320
Diluted 8,727 8,421
Net income per share:
Basic $ 0.41 $ 0.37
Diluted $ 0.40 $ 0.37
========= =========
Segment results For the quarter ended March 31
- ---------------------------------------------- ------------------------------
(In millions) 2005 2004
- ---------------------------------------------- ---------- ----------
Engineering
- -----------
Revenues $ 93.9 $ 74.9
Income from operations before
Corporate overhead 10.1 7.1
Less: Corporate overhead (2.8) (2.8)
---------- ----------
Income from operations 7.3 4.3
---------- ----------
Energy
- ------
Revenues 50.1 50.1
Income from operations before
Corporate overhead 0.1 2.4
Less: Corporate overhead (1.1) (1.1)
---------- ----------
(Loss)/income from operations (1.0) 1.3
---------- ----------
Total Reportable Segments
- -------------------------
Revenues 144.0 125.0
Income from operations before
Corporate overhead 10.2 9.5
Less: Corporate overhead (3.9) (3.9)
---------- ----------
Income from operations 6.3 5.6
---------- ----------
Other Corporate/Insurance expense (0.6) (0.2)
---------- ----------
Total Company - Income from operations $ 5.7 $ 5.4
========== ==========
Backlog
(In millions) At 3/31/05 At 12/31/04
- ---------------------------------------------- ---------- -----------
Total $ 1,420.6 $ 1,399.5
========== ===========
Condensed Balance Sheet
- ----------------------------------------------
(In thousands) At 3/31/05 At 12/31/04
- ---------------------------------------------- ---------- -----------
ASSETS
Cash and cash equivalents $ 9,197 $ 15,471
Receivables, net 91,206 79,559
Unbilled revenues 72,200 71,280
Prepaid expenses and other 9,322 12,941
---------- ----------
Total current assets 181,925 179,251
Property, plant and equipment, net 17,528 17,879
Goodwill and other intangible assets, net 8,876 8,947
Other assets 6,244 5,667
---------- ----------
Total assets $ 214,573 $ 211,744
========== ==========
LIABILITIES & SHAREHOLDERS' INVESTMENT
Accounts payable $ 50,076 $ 48,326
Accrued compensation and insurance 34,884 36,458
Other accrued expenses 23,872 24,629
Billings in excess of revenues 9,615 9,705
---------- ----------
Total current liabilities 118,447 119,118
Other liabilities 5,621 6,094
---------- ----------
Total liabilities 124,068 125,212
---------- ----------
Common Stock 8,939 8,910
Additional paid-in capital 40,503 40,000
Retained earnings 45,225 41,769
Other comprehensive loss (1,163) (1,129)
Unearned compensation expense (46) (65)
Less - Treasury shares (2,953) (2,953)
---------- ----------
Total shareholders' investment 90,505 86,532
---------- ----------
Total liabilities &
shareholders' investment $ 214,573 $ 211,744
========== ==========
SOURCE Michael Baker Corporation
-0- 05/04/2005
/CONTACT: David Higie of Michael Baker Corporation, +1-412-269-6449 /
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