MISCOR Group Reports Third Quarter Results
SOUTH BEND, Ind., Nov 25 /PRNewswire-FirstCall/ -- Industrial services provider MISCOR Group, Ltd. (OTC Bulletin Board: MIGL) reported its operating results for the third quarter ended October 4, 2009.
MISCOR, a supplier of mechanical and electrical industrial products and services, reported total revenues of $19.8 million in the third quarter of 2009, compared with total revenues of $31.5 million in the same quarter of 2008. The Company reported a net loss of $4.4 million, or $0.37 per diluted share, for the current quarter, which included a $2.5 million impairment for goodwill, versus net income of $0.47 million, or $0.04 per diluted share, for last year's third quarter.
MISCOR's decrease in consolidated revenues in the third quarter of 2009 resulted from declines in industrial services segment revenues of $7.3 million, or 49 percent, slightly lower construction and engineering services revenues, which declined $0.4 million, or 4 percent, and a reduction in rail services revenue of $4.0 million, or 55 percent. All three segments were adversely affected by the economic recession and reductions in demand within the manufacturing, transportation and construction industries, as well as by liquidity pressures that led to production slowdowns.
"The challenges of the prolonged economic slowdown and tightened credit markets have led to reduced customer demand and delayed projects," said John Martell, President and CEO of MISCOR. "In response, the Company has taken aggressive cost-cutting measures, increased focus on operating cash flow, and reduced headcount. At the same time, we have maintained strength in our core competencies and continue to deliver value-added solutions for our customers. We are seeing the first signs of economic recovery, and are positioning ourselves for growth."
Total gross profit for the third quarter of 2009 was $1.8 million, or 9 percent of total revenues, compared to gross profit of $5.0 million, or 16 percent of total revenues in the same period of 2008. The Company attributed the decline to decreased unabsorbed overhead costs associated with lower revenues and cost overruns on a few of the Company's electrical contracts.
As of October 4, 2009, MISCOR had approximately $8.0 million of working capital, reflecting a decrease of approximately $7.1 million versus the prior year. The decline was primarily attributed to decreased accounts receivable, which resulted in reduced availability on the Company's revolving credit line.
The Company delayed the filing of its 10-Q while it continued discussions with its lender, Wells Fargo Bank, regarding an extension of the credit agreement and the requirement to raise additional capital. The Company is optimistic that an agreement can be reached to extend the due date on the capital requirement as it continues to explore asset sales, divestitures and other types of alternatives to reduce indebtedness.
On Nov. 20, 2009, MISCOR began trading for a short time under the symbol MIGLE.OB while The Financial Industry Regulatory Authority (FINRA) evaluates the timing of its quarterly filing, which the Company believes was in compliance with Securities and Exchange Commission (SEC) guidelines. As of today the company is again trading under the symbol MIGL.OB.
Martell concluded: "We are continuing to assess the strategic fit of our various businesses and are considering additional divestitures where businesses do not align with our long-term vision. We will explore a number of strategic alternatives for under-performing or non-strategic businesses including possible divestures and are hopeful we will have progress to report in the fourth quarter."
South Bend, Ind.-based MISCOR Group, Ltd. (OTC BB: MIGL) provides electrical and mechanical solutions to industrial, commercial and institutional customers through three segments: Industrial Services, consisting of the Company's maintenance and repair services to several industries including electric motor and wind power and repairing, manufacturing, and remanufacturing industrial lifting magnets for the steel and scrap industries, Construction and Engineering Services, consisting of MISCOR's electrical and mechanical contracting services, mainly to industrial, commercial, and institutional customers, and Rail services, consisting of the Company's manufacturing and rebuilding of power assemblies, engine parts, and other components related to large diesel engines and its locomotive maintenance, remanufacturing, and repair services for the rail industry.
In 2007, MISCOR entered the wind power industry through its acquisition of 3-D Service, Ltd., providing both onsite and in-shop maintenance and repair services for wind farms. MISCOR was ranked on the Inc. 500 in 2004 and 2005 and operates in 15 locations in the U.S. and Canada.
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "could," "will," or variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect the Company's views, expectations and beliefs at the time such statements were made with respect to such matters, and may cover such items as the Company's future plans, objectives, events, contract pricing and results such as revenues, expenses, income, earnings per share, capital expenditures, operating margins, financial position, expected results of operations and other financial items. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and outcomes to differ materially from those described in the forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that make the timing, extent, likelihood and degree of occurrence of these matters difficult to predict. Risk Factors include, among others: price of raw materials, ability to win and service competitively priced new contracts in sufficient amounts to operate and expand effectively, employee turnover, ability to compete in highly competitive, geographically diverse marketplaces, and varying and sometimes volatile economic conditions. For further discussion of risks and uncertainties, individuals should refer to the Company's SEC filings. MISCOR Group, Ltd. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release is issued. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.
SOURCE MISCOR Group, Ltd.