Exhibit 99.2
BAKER FILES FORM 10-Q FOR FIRST QUARTER OF 2006
PITTSBURGH, Aug. 15 /PRNewswire-FirstCall/ -- Michael Baker Corporation (Amex:
BKR) today announced the filing of its Form 10-Q with the Securities and
Exchange Commission for the first quarter of 2006. The financial results
contained in the filing are summarized here.
As outlined in the filing, Baker reported net income of $1.7 million, or $0.20
per diluted share, on total contract revenues of $146 million for the first
quarter of 2006. This compares with net income of $2.9 million, or $0.33 per
diluted share, on total contract revenues of $144 million in first-quarter
2005.
First quarter 2006 revenues in the Engineering business decreased eight percent
from the same period last year, due largely to the absence in the current period
of subcontracting activity on the company's map modernization contract with
FEMA, as the work on the information infrastructure for the contract was
completed in 2005. However, Engineering did experience a six percent increase in
transportation-related revenues as a result of the SAFETEA-LU transportation
infrastructure legislation enacted in August 2005. Operating income before
corporate overhead allocations in Engineering declined, with the major factors
being the lower revenues, including incentive award revenues, associated with
the FEMA contract as well as lower labor utilization rates in the current period
compared to the year-ago quarter. Operating income before corporate overhead
allocations expressed as a percentage of Engineering segment revenues was 8.9
percent for first-quarter 2006, compared to 12.0 percent in first-quarter 2005.
First quarter 2006 revenues in the Energy business increased 17 percent compared
to the first quarter of 2005 due to higher volumes of domestic operations and
maintenance activity with existing clients, and the addition of new domestic
onshore and offshore contracts. Operating income before corporate overhead
allocations also increased in the current period from the breakeven performance
in first-quarter 2005. As a result, operating income before corporate overhead
allocations expressed as a percentage of segment revenues were 2.5 percent for
the current quarter 2006, compared to zero percent in the year-ago period.
The current period was adversely impacted by some continuing penalties and
interest and sales tax issues related to the company's restatement of prior
financial results. Professional fees related to the restatement were
approximately $0.6 million, and these are expected to continue into the second
quarter of 2006. Overall, the impact of these fees is approximately $1.0
million.
The provision for income tax rate for the 2006 first quarter was 47 percent,
compared to 57 percent for the same period last year. The decrease in the tax
rate is attributable to higher estimated full-year domestic and international
taxable income.
Total backlog for the company was $1.36 billion at March 31, 2006, compared to
$1.32 billion at year-end 2005. The first-quarter 2006 backlog includes
approximately $542 million related to the FEMA contract, compared to $566
million at December 31, 2005. Both of the company's business segments recorded
slight increases in backlog during the current period.
Commenting on the results, President and Chief Executive Officer Donald P.
Fusilli, Jr., said, "We did not meet our expectations during the first quarter
for several reasons. The recently completed restatement was a distraction and
consumed a considerable amount of time and attention. We had also anticipated
receiving work under the Government's Base Realignment and Closure program, but
that is moving slower than originally planned. Our target markets, however,
remain strong and our strategy to pursue and win the large complex programs and
projects is represented by the recent awards from FEMA and US-VISIT in
Engineering, and the contracts in Alabama and Alaska in Energy. All of these are
evidence of Baker's ability to achieve our expected goals." He added that the
company expects to report its financial results for the second quarter of 2006
by the end of September.
Michael Baker Corporation has scheduled a conference call and webcast for
Thursday, August 17, at 10:00 AM Eastern Daylight Time to discuss these 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 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, pipelines & telecommunications,
transportation, water/wastewater, and oil & gas. With more than 5,000 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 contains forward-looking statements concerning our future
operations and performance. Forward-looking statements are subject to market,
operating and economic risks and uncertainties that may cause our actual results
in future periods to be materially different from any future performance
suggested herein. 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
our relationship and/or contracts with the Federal Emergency Management Agency
("FEMA"); changes in anticipated levels of government spending on
infrastructure, including the Safe, Accountable, Flexible, Efficient
Transportation Equity Act-A Legacy for Users ("SAFETEA- LU"); changes in loan
relationships or sources of financing; changes in management; and changes in
information systems. 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) 2006 2005
- ---------------------------------------- ------------- -------------
Total contract revenues $ 145,547 $ 144,195
Gross profit $ 20,767 $ 22,375
Income from operations $ 2,851 $ 6,855
Income before taxes $ 3,224 $ 6,632
Net income $ 1,720 $ 2,855
Weighted average shares outstanding:
Basic 8,493 8,524
Diluted 8,732 8,727
Net income per share:
Basic $ 0.20 $ 0.33
Diluted $ 0.20 $ 0.33
- -------------------------------------------------------------------------
For the quarter ended March 31
Segment results ------------------------------
(In millions) 2006 2005
- ---------------------------------------- ------------- -------------
Engineering
Total contract revenues $ 86.6 $ 93.9
Income from operations before
Corporate overhead 7.7 11.3
Less: Corporate overhead (4.2) (2.8)
- -------------------------------------------------------------------------
Income from operations 3.5 8.5
- -------------------------------------------------------------------------
Energy
Total contract revenues 58.9 50.3
Income from operations before
Corporate overhead 1.5 -
Less: Corporate overhead (1.5) (1.1)
- -------------------------------------------------------------------------
(Loss)/income from operations - (1.1)
- -------------------------------------------------------------------------
Total Reportable Segments
- -------------------------
Total contract revenues 145.5 144.2
Income from operations before
Corporate overhead 9.2 11.3
Less: Corporate overhead (5.7) (3.9)
- -------------------------------------------------------------------------
Income from operations 3.5 7.4
- -------------------------------------------------------------------------
Other Corporate/Insurance expense (0.6) (0.5)
- -------------------------------------------------------------------------
Total Company - Income from
operations $ 2.9 $ 6.9
- -------------------------------------------------------------------------
Backlog
(In millions) At 3/31/06 At 12/31/05
- ---------------------------------------- ------------- -------------
Total $ 1,357.5 $ 1,321.8
- -------------------------------------------------------------------------
Condensed Balance Sheet
(In thousands) At 3/31/06 At 12/31/05
- ---------------------------------------- ------------- -------------
ASSETS
Cash and cash equivalents $ 13,131 $ 19,041
Receivables, net 82,884 79,177
Unbilled revenues 92,742 84,654
Prepaid expenses and other 9,895 8,373
- -------------------------------------------------------------------------
Total current assets 198,652 191,245
Property, plant and equipment, net 21,713 21,805
Goodwill and other intangible
assets, net 8,590 8,661
Other assets 4,731 3,750
- -------------------------------------------------------------------------
Total assets $ 233,686 $ 225,461
- -------------------------------------------------------------------------
LIABILITIES & SHAREHOLDERS'
INVESTMENT
Accounts payable $ 46,273 $ 45,570
Accrued compensation and insurance 39,591 37,019
Other accrued expenses and current
liabilities 23,694 23,308
Income taxes payable 11,321 9,827
Billings in excess of revenues 13,252 13,060
Current deferred tax liability 13,198 13,197
- -------------------------------------------------------------------------
Total current liabilities 147,329 141,981
Other liabilities 4,625 3,656
- -------------------------------------------------------------------------
Total liabilities 151,954 145,637
- -------------------------------------------------------------------------
Common Stock 8,991 8,985
Additional paid-in capital 42,162 42,138
Retained earnings 36,059 34,339
Accumulated other comprehensive loss (588) (704)
Unearned compensation (131) (173)
Less - Treasury shares (4,761) (4,761)
- -------------------------------------------------------------------------
Total shareholders' investment 81,732 79,824
- -------------------------------------------------------------------------
Total liabilities &
shareholders' investment $ 233,686 $ 225,461
- -------------------------------------------------------------------------
SOURCE Michael Baker Corporation
-0- 08/15/2006
/CONTACT: David Higie of Michael Baker Corporation, +1-412-269-6449/
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(BKR)