2014

Mastech Holdings, Inc. Reports Third Quarter 2012 Results And Expands Share Repurchase Program

PITTSBURGH, Oct. 24, 2012 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology and Specialized Healthcare staffing services, announced today its financial results for the third quarter ended September 30, 2012.

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

Third Quarter Results:

Revenues for the third quarter of 2012 totaled $25.6 million, which represented a 9% increase over the corresponding quarter last year and a slight improvement over second quarter 2012 revenues.  Sequential revenue growth was achieved with one less billable day during the current quarter and a lower utilization rate due to the impact of summer vacations.  Gross profit in the third quarter of 2012 was $4.9 million compared to $4.6 million in the third quarter of 2011. Consolidated net income for the third quarter 2012 totaled $601,000, or $0.18 per diluted share, compared to $441,000, or $0.12 per diluted share, during the same period last year. 

Demand for our staffing services remained solid. We were able to grow our IT billable consultant-base by 8% during the quarter and achieved sequential revenue growth for the ninth consecutive quarter in our healthcare staffing business.  Overall gross margins in the third quarter were 19.1%, which was flat when compared to the previous quarter and lower than the 19.8% gross margins reported a year earlier.  Lower permanent placement revenues and supply-side pricing pressures on existing assignments have impacted our gross margin performance in the current quarter.

Kevin Horner, Mastech's Chief Executive Officer stated, "Third quarter was a very positive quarter for the Company on a number of fronts. We significantly expanded our IT consultant-base during the quarter; we continued to drive superior top-line revenue growth when compared to most of our industry peers; and we delivered bottom-line earnings per share results that were 50% greater than those of a year ago.  Operationally, we are starting to see some payback from investments aimed at strengthening our recruitment capabilities. While we have more work to do, I believe that our cost-effective, highly scalable recruitment organization will play an important role in enhancing the value proposition that we provide our clients."

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 $3.3 million; no outstanding debt; and access to $15.0 million of borrowing capacity.  During the first nine months of 2012, we spent $2.5 million to repurchase 436,026 shares of common stock under our share repurchase program. At September 30, 2012 we had 171,088 shares still available for purchase under this program, which originally authorized the repurchase of 750,000 shares and is set to expire in December 2012. I'm pleased to announce that our Board of Directors has elected to increase the number of shares authorized to be purchased under this program by 250,000 and has extended the duration of the program for an additional two years, through December 22, 2014."

In conjunction with its third quarter earnings release, Mastech will host a conference call at 9:00 A.M. EDT on October 24, 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 October 31, 2012.

About Mastech Holdings, Inc.:

Leveraging the power of 25 years of IT experience, Mastech (NYSE MKT: 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)







September 30,


December 31,



2012


2011






ASSETS





Current assets:





     Cash and cash equivalents 


$                     3,253


$                   5,755

     Accounts receivable, net 


14,391


11,925

     Prepaid and other current assets


1,324


1,046

     Deferred income taxes


21


177

           Total current assets


18,989


18,903






Equipment, enterprise software and leasehold improvements, net


265


273






Goodwill and intangible assets, net


436


458






Deferred  financing costs, net


54


74






Deferred income taxes


205


80






           Total  assets


$                 19,949


$               19,788






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities:





     Accounts payable


$                     1,907


$                   2,309

     Accrued payroll and related costs


5,363


4,002

     Deferred revenue and other liabilities


428


430

           Total current liabilities


7,698


6,741






           Total liabilities


7,698


6,741






Shareholders' equity:





     Common stock, par value $0.01 per share


38


37

     Additional paid-in capital


10,383


10,114

     Retained earnings


4,873


3,462

     Accumulated other comprehensive income


45


-

     Treasury stock, at cost


(3,088)


(566)

          Total shareholders' equity


12,251


13,047

           Total liabilities and shareholders' equity


$                 19,949


$               19,788

 

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,


2012


2011


2012


2011









Revenues

$                     25,629


$                       23,489


$                 75,395


$                        65,505









Cost of revenues

20,744


18,840


61,221


52,574









Gross profit

4,885


4,649


14,174


12,931









Selling, general and administrative expenses

3,945


3,921


11,867


11,516









Income from operations 

940


728


2,307


1,415









Other income/(expense), net

35


(18)


(21)


(32)









Income before income taxes

975


710


2,286


1,383









Income tax expense

374


269


875


523









Net income

$                          601


$                            441


$                   1,411


$                             860









Earnings per share:








Basic

$                         0.19


$                           0.12


$                     0.43


$                            0.23

Diluted

$                         0.18


$                           0.12


$                     0.42


$                            0.23









Weighted average common shares outstanding:








Basic

3,176


3,657


3,271


3,673

Diluted

3,277


3,755


3,376


3,786

SOURCE Mastech Holdings, Inc.



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http://www.mastech.com

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