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Mastech Holdings, Inc. Reports Third Quarter 2011 Results

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PITTSBURGH, Oct. 19, 2011 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE Amex: MHH – News), a national provider of Information Technology and Specialized Healthcare staffing services, announced today its financial results for the third quarter ended September 30, 2011.

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

Third Quarter Results:

Revenues for the quarter were $23.5 million which represented a 24% increase over the corresponding quarter last year.  Gross profit in the 2011 quarter totaled $4.6 million or approximately $1.0 million greater than those achieved during the third quarter of 2010. Gross margins of 19.8% were better than the 19.3% generated last year.  Consolidated net income for the third quarter 2011 totaled $441,000 or $0.12 per diluted share, compared to $187,000 or $0.05 per diluted share, in the same period last year.  

Despite a significant amount of economic uncertainty during the third quarter, our business activity levels remained stable.  Demand for our IT staffing services was higher than the previous quarter and our healthcare staffing business continued to achieve sequential revenue growth for the fifth consecutive quarter.

Kevin Horner, Chief Executive Officer of Mastech stated, "I'm pleased to report that during the quarter we grew total revenues by 6.2% sequentially and delivered an earnings per share performance that was $0.02 per diluted share better than second quarter 2011's results.  This solid performance reflects operating leverage opportunities in our cost structure and improvements in operating efficiencies, as selling, general and administrative expenses declined to 16.7% of revenues."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our balance sheet remains strong with $5.6 million of cash on hand and no outstanding debt. During the quarter we amended our credit facility with PNC Bank which was set to expire on October 15, 2011.  The amended facility increases our maximum borrowing capacity to $19 million and extends the term of the agreement through August 31, 2014."

In conjunction with its third quarter earnings release, Mastech will host a conference call at 9:00 A. M. EDT on October 19, 2011 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 October 26, 2011.

About Mastech Holdings, Inc.:

Leveraging the power of over 20 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 STATEMENTS OF OPERATIONS


(Amounts in thousands, except per share data)


(Unaudited)



Three Months ended September 30,


Nine Months ended September 30,



2011


2010


2011


2010











Revenues

$                       23,489


$                  18,869


$            65,505


$                    51,506











Cost of revenues

18,840


15,230


52,574


41,428











Gross profit

4,649


3,639


12,931


10,078











Selling, general and administrative expenses

3,921


3,310


11,516


9,447











Income from operations

728


329


1,415


631











Other income/(expense), net

(18)


(4)


(32)


(18)











Income before income taxes

710


325


1,383


613











Income tax expense

269


138


523


254











Net income

$                            441


$                        187


$                 860


$                          359











Earnings per share:









Basic

$                           0.12


$                      0.05


$                0.23


$                         0.10


Diluted

$                           0.12


$                       0.05


$                0.23


$                         0.10











Weighted average common shares outstanding:









Basic

3,657


3,691


3,673


3,667


Diluted

3,755


3,752


3,786


3,742




MASTECH HOLDINGS, INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(Amounts in thousands)


(Unaudited)









September 30,


December 31,




2011


2010








ASSETS






Current assets:






    Cash and cash equivalents


$                     5,614


$                   6,334


    Accounts receivable, net


12,374


9,721


    Prepaid and other current assets


1,233


1,395


    Deferred income taxes


93


177


          Total current assets


19,314


17,627








Equipment, enterprise software and leasehold improvements, net


185


185








Goodwill and intangible assets, net


468


498








Investment in unconsolidated affiliate


-


5








Deferred  financing costs, net


81


-








Deferred income taxes


87


82








          Total  assets


$                   20,135


$                 18,397








LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






    Accounts payable


$                     2,013


$                   2,695


    Accrued payroll and related costs


4,748


3,024


    Deferred revenue and other liabilities


361


330


          Total current liabilities


7,122


6,049








          Total liabilities


7,122


6,049








Shareholders' equity:






    Common stock, par value $0.01 per share


37


37


    Additional paid-in capital


10,086


9,962


    Retained earnings


3,209


2,349


    Treasury stock, at cost


(319)


-


         Total shareholders' equity


13,013


12,348


          Total liabilities and shareholders' equity


$                   20,135


$                 18,397



SOURCE Mastech Holdings, Inc.



RELATED LINKS
http://www.mastech.com

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