MHH - Earnings call transcript Q3 2019

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Operator

Greetings, and welcome to the Mastech Digital Incorporated Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Jennifer Ford Lacey, Manager of Legal Affairs. Thank you, you may begin.

Jennifer Ford Lacey

Thank you, operator, and welcome to Mastech Digital’s third quarter 2019 conference call.

yet be copy at obtained not announcement, our www.mastechdigital.com. have can it from you received of a earnings If our website

Digital’s beliefs this I would With Vivek as plans, to remind Jack statements call the operate. statements like are statements. our our financial in Chief and made not that Mastech projections facts during Cronin, These Officer. me strategies, and that liquidity Executive our Financial about forward-looking markets today include our Chief everyone Officer; flows, call on well Gupta, are forward-looking cash statements are and as the business, costs concerning intentions growth and we which historical

forward-looking uncertainties these currently Exchange on obligation to Without www.sec.gov. to and filed that words and available annual change. events report anticipates, limiting the could Form actual including no expressions expects available are website its we on foregoing, are the assume and statements XXXX these plans, believes, in and Securities statements, risks listed There the based with forward-looking on These to and statements. statements company’s identify us, information cause from Commission XX-K are materially circumstances as the certain update at differ those similar intended to

Additionally, our financial non-GAAP financial elected GAAP management supplement has to measures results a to provide certain basis. presented on

can measures respect from in greater operating with and their of earnings earnings in our GAAP are share per Reconciliations non-GAAP at transparency we key by income obtained will which diluted our www.mastechdigital.com. non-GAAP measures non-GAAP these we website net provide provide included to business. announcement, Specifically, will data, which metrics comparable be our believe financial management to used

calls. we guidance provide call reminder, not will or subsequent any during a we this one-on-one providing meetings will As guidance in nor be

call results. quarter to now Jack our will the turn review a XXXX of I for over third

Jack Cronin

since million to XX% good for totaled and in Thanks, both the morning, a compared as of represented million, quarter XXXX These segments business our of public quarter our Jen, increase XXXX. the revenue record in $XX.X $XX.X reported results XXXX going performance Revenues revenues. of third everyone. third highest

and increased X% an fourth previous of data performance project third a pipeline and activity growth win our analytics the reflected of add segment quarter’s activity I of $X.X of and strong of represented was same increase improving also larger opportunities should XXXX, This QX rate million of which over a quarter our improved better a Our performance revenue consecutive the services over last year. levels, contributed XX% levels ratio. revenues. that QX and quarter quarter consecutive represented during

services when staffing compared XX% year-over-year IT of XXXX. of XXXX revenue QX Our in growth QX to generated segment

third Additionally, a XX billing the IT record the demand Also, to XXXX, company’s consultants of for continued consultants. during quarter our by be on segment. increased staffing we and strong quarterly

Gross compared in $XX.X million the profit same for year. of XXXX QX last to totaled $XX.X period million

third for XXXX basis margins XX compared XX.X% up revenues, of to of gross Our XXXX. XX.X% the in were QX quarter points

Better a of improved XXX on our of services points pricing new than contributed gross on XXXX, was improvement. quarter basis corresponding in and segment analytics data and assignments margins services QX utilization this Our resources higher which higher-valued XXXX. had to the technical XX.X% of

million points third or million the margins of had Our IT of quarter XX.X%, $X.X a in to were SG&A $X.X gross staffing third the in which XX.X%, of represented and of services total gross improvement. exceeded XXXX revenues of quarter segment XX.X% third revenues XXXX basis QX of quarter XXXX compared expenses XX.X% margins XXXX. XX

and to in service and well have data the enhance portfolio current invest During to continued analytics received our marketplace. been we the segment quarter, which our offerings, in services very

for of growth IT QX XXXX. per diluted are staffing incremental income $X.XX totaled ensure make the future. or GAAP for million $X.X per to the share, – continuing our to share XXXX quarter in investments third $X.X segment income of in we Net compared Additionally, sustainable million services diluted net $X.XX to or

income quarter million or net was share for of XXXX quarter compared to of the per diluted per share, $X.XX million $X.X or the Non-GAAP corresponding in third $X.X diluted XXXX. $X.XX

our expense included QX compensation. SG&A the quarter These intangible Third in our are net available in items of non-GAAP and earnings benefits measures which financial is tax stock-based items acquired amortization detailed were website. not on of release, assets

our September line. Addressing under XX, $XX.X cash bank net our approximated and debt revolving $XX.X borrowing XXXX, on availability we at million of credit of our had financial balances existing position million outstanding hand,

XXXX, During time, the and same $XXX,XXX. improved approximately September flows by by balances our with generated cash million months $XX.X ended operations, debt the cash at XX, nine we bank reduced from

For as cloud-based ERP system new second conversion materially consecutive outstanding improved the the behind our days quarter, implementation us. cash sales we to related issues of our management well are

I’ll Vivek for turn call to now the his comments. over

Vivek Gupta

operating you, our for Thank QX the financial detailed everyone. results review for Jack, Good morning, of XXXX.

start quarterly over since me third took role our I’m delighted XXXX. Let CEO quarter performance ways I that strongest the which saying performance, by March many was with truly our in in

that segment Our revenue we $X continue confident will growth million be quarterly services journey. and I’m and broke barrier there’ll many that first time, be the more our broken data for analytics the barriers as

in margins expanded our improved operating Revenues XX% continued XX%, by gross business. basis were investments XXX despite margins points this up and by year-over-year,

pipeline our and opportunities Our continues our offerings. ratio of to new has with service project nicely improved win grow

job led Burton, sustainable by Paul management of growth. new future Mastech Our commendable has positioning for InfoTrellis a done team,

say basis. be a our other next records importantly, segment, level business where I’m very can quarterly growing I’m very XXXX, high of Addressing business pleased year-over-year this million business QX that IT a to excited on at generating continued where our and to and in as perform services staffing the to at several revenues XX% years. today, is $XX.X in revenues more it

this an exceptional America, performance, Considering segment. is is leading at and growing this X% that the of the IT proud staffing of in I’m rate really industry management team a North

expanded digital gross year-over-year rate XX% and our to both by bill average we and Additionally, on basis, operating technologies. improved margins focus income by continuing a on

financial acknowledge like significant improvement the the to would several Lastly, quarters. position last in our I over

Jack we favorably cash performance much lower materially availability. and using operations reduced debt we cash than This in from enter and interest has leverage XXXX which lower expense our to increased As our our will value from mentioned, a ratios ratio Accordingly, our flows XXXX levels. debt should and are debt-to-equity with levels. shareholder XXXX, impact lower

session the your open now questions. will I for

Operator

we closing would comments. time. management like question-and-answer are There turn [Operator no you. to conduct queue in this Thank At time, this I the session. will to for a at back Instructions] questions call

Vivek Gupta

questions, you operator. no to thank quarter Thank you look early there Thank I you. today would sharing results are with we call to like joining for XXXX February. in fourth If forward our our you, and

Operator

today’s concludes This teleconference.

your disconnect at time, may You and this have lines great a day.

Mastech Digital (MHH) 29 Oct 192019 Q3 Earnings call transcript