Mastech Holdings, Inc. Reports Fourth Quarter and Full Year 2011 Results

01 Feb, 2012, 07:30 ET from Mastech Holdings, Inc.

PITTSBURGH, Feb. 1, 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 fourth quarter and full year ended December 31, 2011.

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Fourth Quarter Results:

Revenues for the quarter were $23.9 million and represented an 18% increase over the corresponding quarter last year and a 2% improvement over third quarter 2011 results.  Gross margins in the 2011 quarter totaled 19.3% compared to 19.7% for the 2010 quarter.  Consolidated net income for the fourth quarter 2011 totaled $253,000 or $0.07 per diluted share, compared to $304,000 or $0.08 per diluted share, in the same period last year.  The 2011 fourth quarter results included severance expense equal to $0.05 per diluted share, related to the elimination of several executive positions during the quarter.

Demand for our IT staffing services remained solid during the fourth quarter when considering the normal year-end industry trends. Market conditions in healthcare staffing remained largely positive and we were able to achieve sequential revenue growth for the sixth consecutive quarter.  

Full Year Results:

Revenue for the year totaled $89.4 million, or 24% higher than 2010 revenues of $71.8 million.  Gross margins for the full year 2011 were 19.6% which was in-line with last year's gross margin performance.  Consolidated net income for 2011 totaled $1.1 million or $0.30 per diluted share, compared to $663,000 or $0.18 per diluted share in 2010.

Kevin Horner, Mastech's Chief Executive Officer, stated, "We are pleased with the results that we delivered during the quarter and for the full year 2011.  For the year, we organically grew our revenues and consultant-base by over 20%, increased profitability by approximately 67% and rationalized our management cost structure to better position us to continue to outperform our industry peers."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our balance sheet remains strong. We enter 2012 positioned with the financial flexibility to support our growth objectives and to capitalize on inorganic value creation opportunities.  At December 31, 2011, cash on hand totaled $5.8 million; we had no outstanding debt; and have access to a credit facility with a maximum borrowing capacity of $19 million."

In conjunction with its fourth quarter earnings release, Mastech will host a conference call at 9:00 A.M. EST on February 1, 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 February 8, 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, 2010.

MASTECH HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

December 31,

December 31,

2011

2010

ASSETS

Current assets:

    Cash and cash equivalents

$            5,755

$            6,334

    Accounts receivable, net

11,925

9,721

    Prepaid and other current assets

1,046

1,395

    Deferred income taxes

177

177

          Total current assets

18,903

17,627

Equipment, enterprise software and leasehold improvements, net

273

185

Goodwill and intangible assets, net

458

498

Investment in unconsolidated affiliate

-

5

Deferred  financing costs, net

74

-

Deferred income taxes

80

82

          Total  assets

$          19,788

$          18,397

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

    Accounts payable

$            2,309

$            2,695

    Accrued payroll and related costs

4,002

3,024

    Deferred revenue and other liabilities

430

330

          Total current liabilities

6,741

6,049

          Total liabilities

6,741

6,049

Shareholders' equity:

    Common stock, par value $0.01 per share

37

37

    Additional paid-in capital

10,114

9,962

    Retained earnings

3,462

2,349

    Treasury stock, at cost

(566)

-

         Total shareholders' equity

13,047

12,348

          Total liabilities and shareholders' equity

$          19,788

$          18,397

MASTECH HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

Three Months ended December 31,

Years ended December 31,

2011

2010

2011

2010

Revenues

$ 23,857

$ 20,282

$ 89,362

$ 71,788

Cost of revenues

19,247

16,290

71,821

57,718

Gross profit

4,610

3,992

17,541

14,070

Selling, general and administrative expenses

4,164

3,559

15,680

13,006

Income from operations

446

433

1,861

1,064

Other income/(expense), net

(37)

(8)

(69)

(26)

Income before income taxes

409

425

1,792

1,038

Income tax expense

156

121

679

375

Net income

$      253

$      304

$   1,113

$      663

Earnings per share:

Basic

$     0.07

$     0.08

$     0.30

$     0.18

Diluted

$     0.07

$     0.08

$     0.30

$     0.18

Weighted average common shares outstanding:

Basic

3,594

3,691

3,653

3,673

Diluted

3,651

3,758

3,756

3,746

SOURCE Mastech Holdings, Inc.



RELATED LINKS

http://www.mastech.com