UniTek Global Services Announces Financial Results for Fiscal Second Quarter 2010

BLUE BELL, Pa., Aug. 17 /PRNewswire-FirstCall/ -- UniTek Global Services, Inc. ("UniTek" or the "Company" (OTC Bulletin Board: UGLB), a premier provider of permanently outsourced infrastructure services to the wireless and wireline telecommunications, broadband cable and satellite television industries, today announced financial results for fiscal second quarter 2010.  

Financial and Business Highlights – Quarter ended July 3, 2010

• Revenue was $106 million compared to $69 million for the second quarter of 2009 – a 53% increase.
• Adjusted EBITDA (as defined below) increased 179% to $8.0 million compared to $2.9 million in the second quarter of 2009, on a pro forma basis factoring in the merger with Berliner.
• Operating income increased by 111% to $0.5 million and net loss improved $3.0 million to $6.1 million compared to $9.2 million for the second quarter of 2009
• Three-year backlog was approximately $735 million at July 3, 2010.  

The Company's Chief Executive Officer, C. Scott Hisey, stated, "We are very pleased with the results of our second quarter for 2010.  The Berliner merger and subsequent integration have gone well and proven our scalable model can produce operational efficiencies in a rapidly expanding wireless service business.  We continue to win new business in all four of our vertical markets, increasing our backlog and participating in escalated bid activity in the wireline construction industry.  Our fulfillment segment remains strong as we continue to win new business and grow our recurring revenue stream.  We have a history of consistent growth that we have successfully executed through our comprehensive operational metrics and ability to differentiate our performance with our internal systems and rapid deployment of a skilled workforce.  Our management team continues to innovate and we believe that we are poised to execute our backlog and win new business." 

Financial Results for Quarter Ended July 3, 2010(1)

Revenue increased 53% to $105.8 million for the three months ended July 3, 2010 from $69.2 million for the three months ended July 4, 2009. Of this increase, $10.5 million was attributable to organic growth in our fulfillment segment and acquisitions completed in the fourth quarter of 2009.   Of the remaining revenue gain, $25.4 million reflects the operations of Berliner which have been included in our consolidated results since the date of the merger on January 27, 2010.  

Gross profit from continuing operations for the three months ended July 3, 2010 was $16.3 million, or 15.4% of revenue, compared to $9.1 million, or 13.2% of revenue, for the three months ended July 4, 2009.  Gross profit increased in large part due to operational and profitability improvements in our fulfillment segment including the use of field technology, dispatch cost reduction programs and various other efficiency efforts.  Of the remaining increase in gross profit, $2.3 million was attributable to the operations of Berliner which are included in the engineering and construction segment. This represents a significant turnaround and improvement in the operations of Berliner since the date of the merger on January 27, 2010.

Adjusted pro forma EBITDA(2) increased 176% to $8.0 million for the three months ended July 3, 2010 compared to $2.9 million for the three months ended July 4, 2009.  The fulfillment segment's year over year gain of $4.7 million in EBITDA was the main contributor to this increase.  The EBITDA improvement also includes a $1.6 million increase in Berliner's adjusted pro forma EBITDA as a result of increased demand for our wireless services, the integration of Berliner into our PROS operating system and cost reductions.   These increases in EBITDA were partially offset by higher selling, general and administrative expenses to support the combined businesses and increased revenue.

Our net loss improved by $3.0 million to ($6.1) million, or ($0.04) per basic and fully diluted share (based on approximately 137 million weighted average shares outstanding), for the three months ended July 3, 2010, from a loss of ($9.2) million, or ($0.08) per basic and fully diluted share (based on approximately 109 million weighted average shares outstanding), for the three months ended July 4, 2009.  Our net loss includes $7.1 million of depreciation and amortization of intangible assets and $6.2 million of interest expense (including $1.8 million in non-cash charges) for the three months ended July 3, 2010.

Our three-year backlog was approximately $735.0 million as of July 3, 2010 and $709.0 million as of July 4, 2009, on a pro forma basis factoring in the merger with Berliner(3).  

A reconciliation of adjusted pro forma EBITDA to net loss for the three month periods is as follows (amounts in thousands):

Conference Call:

Management will be hosting a conference call to review the financial results of UniTek at 4:30 p.m. Eastern Time, on Wednesday, August 18, 2010. Interested parties may access the call by calling 1-877-941-8416 from within the United States, or 1-480-629-9808 if calling internationally and requesting conference call 4340249.  Please dial-in approximately five minutes prior to the start of the call. A replay will be available through September 1, 2010 and can be accessed by dialing 1-877-870-5176 (U.S.), 1-858-384-5517 (International), passcode 4340249.

The call will also be web cast by ViaVid Broadcasting and can be accessed at www.unitekgs.com or at ViaVid's website at http://www.viavid.net or by going to the following link http://viavid.net/dce.aspx?sid=000078EC.  The web cast can be accessed until September 1, 2010. To access the web cast, you will need to have the Windows Media Player on your desktop.  For the free download of the Media Player please visit: http://www.microsoft.com/windows/windowsmedia/en/download

About UniTek Global Services

UniTek Global Services is a provider of engineering, construction management and installation fulfillment services to companies specializing in the telecommunications, broadband cable, wireless and satellite industries. UniTek has created a scalable operating platform, enabling each UniTek subsidiary to deliver quality services to its Fortune 200 customers. UniTek, based in Blue Bell, PA, utilizes a diverse workforce of over 5,200 deployed throughout over 102 locations in the United States and Canada.  

The statements in this press release, which are not historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts, including but not limited to statements regarding the impact of changes in the Company's revenue mix, the Company's expected backlog completion and the Company's expectations for its business units in fiscal year 2010. These statements are subject to uncertainties and risks including, but not limited to, operating performance, general financial, economic, and political conditions affecting the Company's business and its target industries, the ability of the Company to perform its obligations under its contracts and agreements with customers and other risks contained in reports filed by the Company with the Securities and Exchange Commission, including in our Form 10-Q for the quarter ended July 3, 2010. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

(1) In the merger of Berliner and UniTek, UniTek is the accounting acquirer with Berliner the legal acquirer and registrant.  Upon the completion of the merger, Berliner changed its fiscal year end from June 30 to December 31.  Berliner filed a Transition Report on Form 10-K on March 31, 2010 for the six-month period ended December 31, 2009.  As the accounting acquirer, UniTek's historical results are presented for comparison purposes with results of Berliner included in our consolidated results only after the effective date of the merger, which was January 27, 2010.

(2) Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a key indicator used by our management to evaluate operating performance of our company. While the Adjusted EBITDA is not intended to replace any presentation included in these consolidated financial statements under generally accepted accounting principles (GAAP) and should not be considered an alternative to operating performance or an alternative to cash flow as a measure of liquidity, we believe this measure is useful to investors in assessing our performance with other companies in our industry. This calculation may differ in method of calculation from similarly titled measures used by other companies.  Adjusted pro forma EBITDA is our EBITDA adding back transaction costs for the merger and including the results of Berliner as if it had occurred at the beginning of the period being presented.

(3) Our backlog consists of uncompleted portions of services to be performed under job-specific contracts and the estimated value of future services that we expect to provide under master service agreements and other long-term contracts. Many of our contracts are multi-year agreements. We include in our backlog the amount of services projected to be performed over the terms of the contracts, where applicable, or based on our historical experience with customers and our experience in procurements of this type.

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SOURCE UniTek Global Services, Inc.