Versar, Inc. Announces First Quarter Fiscal 2016 Results

Nov 05, 2015, 08:30 ET from Versar, Inc.

SPRINGFIELD, Va., Nov. 5, 2015 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fiscal first quarter ended September 25, 2015. 

Financial Results

Gross revenue for the first quarter of fiscal year 2016 increased 52% to $44.9 million, compared to revenues of $29.6 million during the first quarter of the last fiscal year.  Gross margins decreased to 5%, compared to 9% in the same prior year quarter, primarily due to product mix and approximately $200,000 in one-time expenses related to the Company's acquisition of Johnson Controls Security Systems (JCSS), now known as Versar Security Systems (VSS).  Net loss for the quarter was $431,000 or ($0.04) per share compared to a net loss of $89,000 or a loss of ($0.01) per share in the same period of fiscal 2015.   

Tony Otten, CEO of Versar, said, "We delivered strong revenue growth in the first quarter of fiscal 2016 and are well positioned for enhanced profitability as we move into the balance of the fiscal year.  The substantial revenue growth was primarily driven by our Dover Air Force Base contract, a strategically important project for us as we broaden the Company's portfolio of capabilities for our customers.  This construction project has lower margins than the balance of our revenue and affected overall gross margins, as we discussed during our year-end earnings call in September.   Importantly, the first quarter is typically our least profitable quarter as we focus on bid proposals at the end of the government's fiscal year.  That said, we continued to manage our expenses prudently during the quarter as reflected by our relatively flat SG&A."   

Mr. Otten continued, "Our funded backlog of $225 million as of October 1, 2015 is 26% higher than the funded backlog on June 26, 2015.  The mix of this backlog includes higher margin business due to our improved business development capabilities as well as our acquisition of JCSS, which closed just after the end of the quarter.  JCSS is an excellent acquisition for us, bringing new, high margin, classified construction capabilities.  Our pipeline is substantial as marketplace recognition of our expanded capabilities and demand for our customized solutions remain strong." 

Funded Backlog

As of September 25, 2015, Versar recorded funded backlog of approximately $157 million, as compared to $179 million of funded backlog at the end of fiscal year 2015.  Versar's fiscal first quarter closed before the Government's fiscal year end of September 30, 2015, thus the first quarter did not include additional funded awards received during the last five days of September 2015.  The Company's funded backlog as of October 1, 2015 was $225 million, including Government awards and backlog from its acquisition of JCSS.     

During the quarter, the Company's joint venture with Johnson Controls Federal Systems was awarded a $2.5 million contract from the Air Force Civil Engineer Center to provide construction services at Mountain Home Air Force Base in Idaho. 

"We believe that our broadened capabilities and proven reputation for providing customized solutions in difficult terrains and challenging locations positions us well to drive continued revenue growth, improved margins and a return to profitability as we move through Fiscal 2016," Mr. Otten concluded.   

Conference Call:

The Company will hold a conference call at 2:00 PM Eastern Time today, Thursday, November 5, to discuss the Company's operational performance and financial results for the fiscal first quarter ended September 25, 2015. 

The dial in number for the US and Canada is toll free, 877-407-8033. The international dial in number is 201-689-8033. Participants should call in a few minutes before 2:00 PM Eastern Time. For those unable to attend the conference call, a replay will be available on Versar's website, www.versar.com  

VERSAR, INC., headquartered in Springfield, Virginia, is a publicly-traded global project management company providing sustainable value-oriented solutions to government and commercial clients in the construction management, environmental services, munitions response, and professional services market areas.

VERSAR operates the following web sites, www.versar.com and www.versarpps.com.

This news release contains forward-looking information.  The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended June 26, 2015, as updated from time to time in the Company's periodic filings. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements.

 

Contact:   

David Gray 

John Nesbett or Jennifer Belodeau


Director of Financial Reporting  

Institutional Marketing Services (IMS)


Versar, Inc.  

(203) 972-9200


(703) 642-6888 

jnesbett@institutionalms.com


dgray@versar.com 


 

VERSAR, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)



As of



September 25,

2015

(Unaudited)


June 26,

2015

ASSETS





Current assets





Cash and cash equivalents

$

396

$

2,109

Accounts receivable, net


47,580


57,171

Inventory, net


1,227


1,188

Prepaid expenses and other current assets


2,508


1,540

Deferred income taxes


1,396


1,366

Income tax receivable


915


2,373

Total current assets


54,022


65,747

Property and equipment, net


2,042


2,084

Deferred income taxes, non-current


441


414

Goodwill


16,066


16,066

Intangible assets, net


4,388


4,643

Other assets


252


252

Total assets

$

77,211

$

89,206






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities





Accounts payable

$

23,211

$

35,852

Accrued salaries and vacation


2,499


3,332

Line of Credit


1,770


-

Other current liabilities


653


1,114

Notes payable, current


3,329


2,313

Total current liabilities


31,462


42,611

Notes payable, non-current


5,375


5,835

Other long-term liabilities


1,446


1,390

 Total liabilities


38,283


49,836






Stockholders' equity





Common stock $.01 par value; 30,000,000 shares authorized;
10,132,673 shares issued and 9,808,832 shares outstanding as of
September 25, 2015,
10,128,923 shares issued and 9,805,082 shares outstanding 
as of June  26, 2015.


101


101

Capital in excess of par value


30,889


30,798

Retained earnings


10,010


10,439

Treasury stock, at cost


(1,460)


(1,460)

Accumulated other comprehensive loss;

    foreign currency translation


(612)


(508)

Total stockholders' equity


38,928


39,370

Total liabilities and stockholders' equity

$

77,211

$

89,206

 

 

VERSAR, INC. AND SUBSIDIARIES


Consolidated Statements of Operations


(in thousands, except per share amounts)





For the Three Months Ended





September 25,
2015


September 26,
2014









GROSS REVENUE


$

44,905

$

29,586


   Purchased services and materials, at cost



29,767


12,228


   Direct costs of services and overhead



12,826


14,752


GROSS PROFIT



2,312


2,606









   Selling, general and administrative expenses



2,854


2,691


OPERATING INCOME (LOSS)



(542)


(85)









OTHER EXPENSE







   Interest expense



175


57


LOSS BEFORE INCOME TAXES



(717)


(142)









   Income tax expense (benefit)



(286)


(53)









NET LOSS



(431)


(89)


NET INCOME PER SHARE-BASIC and DILUTED


$

(0.04)

$

(0.01)
















WEIGHTED AVERAGE NUMBER OF SHARES

OUTSTANDING-BASIC



9,808


9,711


WEIGHTED AVERAGE NUMBER OF SHARES

OUTSTANDING-DILUTED



9,808


9,711









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SOURCE Versar, Inc.



RELATED LINKS

http://www.versar.com/