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Mastech Holdings, Inc. Reports First Quarter 2012 Results

PITTSBURGH, April 25, 2012 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE Amex: MHH), a national provider of Information Technology and Specialized Healthcare staffing services, announced today its financial results for the first quarter ended March 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20100507/NE01385LOGO )

First Quarter Results:

Revenues for the first quarter were $24.5 million, which represented a 23% increase over the corresponding quarter last year and a 2.5% improvement over fourth quarter 2011 results.  Gross profit in the first quarter totaled $4.5 million compared to $3.8 million in the first quarter of 2011. Consolidated net income for the first quarter 2012 totaled $352,000, or $0.10 per diluted share, compared to $37,000, or $0.01 per diluted share, in the same period last year.  Both the first quarter of 2012 and 2011 included severance expense equal to $0.02 per diluted share.

Demand for our IT and healthcare staffing services remained solid during the first quarter of 2012.  Supply-side pricing pressures are starting to emerge within certain technologies of the IT business, as resources are commanding higher compensation levels. Market conditions in healthcare staffing remained largely positive and we achieved sequential revenue growth for the seventh consecutive quarter. 

Kevin Horner, Mastech's Chief Executive Officer stated, "While we are pleased with 23% revenue growth for the quarter, we have to do a better job helping our client base understand the changes which are happening on the supply-side of the market.  A tightening of industry supply will cause hardships for clients who are slow to recognize these industry trends. Additionally, we need to quickly adjust our pricing model to reflect these market dynamics."

Commenting on the Company's financial position, Jack Cronin, Mastech's Chief Financial Officer, stated, "Our balance sheet remains strong with cash on hand of $2.7 million; no outstanding debt; and access to $14.1 million of borrowing capacity as of March 31, 2012.  During the quarter, we completed a partial tender offer in which we repurchased approximately 12% of our outstanding common stock.  This $2.5 million transaction was entirely funded with cash balances on hand."

In conjunction with its first quarter earnings release, Mastech will host a conference call at 9:00 A.M. EDT on April 25, 2012 to discuss these results and to answer questions.  A live webcast of this conference call will be available on the company's website, www.mastech.com.  Simply click on the Investor Relations section and follow the links to the live webcast.  The webcast will remain available for replay through May 2, 2012.

About Mastech Holdings, Inc.:

Leveraging the power of 25 years of IT experience, Mastech (NYSE Amex: MHH) provides Information Technology Staffing services in the disciplines which drive today's business operations and Specialized Healthcare Staffing services to hospitals and other healthcare facilities.  More information about Mastech can be found at Mastech's website: www.mastech.com.

Forward-Looking Statements:

Certain statements contained in this release are forward-looking statements based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of revenues, earnings,  and cash flow.  These statements are based on information currently available to the Company and it assumes no obligation to update the forward-looking statements as circumstances change.  These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors, including, without limitation, the level of market demand for its services, the highly competitive market for the types of services offered by the company, the impact of competitive factors on profit margins, market conditions that could cause the Company's customers to reduce their spending for its services, and the company's ability to create, acquire and build new lines of business, to attract and retain qualified personnel, reduce costs and conserve cash, and other risks that are described in more detail in the company's filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2011.














MASTECH HOLDINGS, INC.








CONDENSED CONSOLIDATED BALANCE SHEETS








(Amounts in thousands)








(Unaudited)





















March 31,


December 31,










2012


2011




















ASSETS












Current assets:












     Cash and cash equivalents 


$          2,748


$                   5,755








     Accounts receivable, net 


13,454


11,925








     Prepaid and other current assets


722


1,046








     Deferred income taxes


153


177








           Total current assets


17,077


18,903




















Equipment, enterprise software and leasehold improvements, net


304


273




















Goodwill and intangible assets, net


451


458




















Deferred  financing costs, net


67


74




















Deferred income taxes


181


80




















           Total  assets


$      18,080


$               19,788




















LIABILITIES AND SHAREHOLDERS' EQUITY












Current liabilities:












     Accounts payable


$          2,234


$                   2,309








     Accrued payroll and related costs


4,542


4,002








     Deferred revenue and other liabilities


354


430








           Total current liabilities


7,130


6,741




















           Total liabilities


7,130


6,741




















Shareholders' equity:












     Common stock, par value $0.01 per share


37


37








     Additional paid-in capital


10,156


10,114








     Retained earnings


3,814


3,462








     Treasury stock, at cost


(3,057)


(566)








          Total shareholders' equity


10,950


13,047








           Total liabilities and shareholders' equity


$      18,080


$               19,788




















  


MASTECH HOLDINGS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(Amounts in thousands, except per share data)


(Unaudited)



Three Months ended March 31,



2012


2011







Revenues

$                       24,454


$                         19,901







Cost of revenues

19,994


16,057







Gross profit

4,460


3,844







Selling, general and administrative expenses

3,864


3,778







Income from operations 

596


66







Other income/(expense), net

(23)


(7)







Income before income taxes

573


59







Income tax expense

221


22







Net income

$                            352


$                                37







Earnings per share:





Basic

$                           0.10


$                             0.01


Diluted

$                           0.10


$                             0.01







Weighted average common shares outstanding:





Basic

3,481


3,690


Diluted

3,582


3,799

 


 

SOURCE Mastech Holdings, Inc.



RELATED LINKS
http://www.mastech.com

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