Versar, Inc. Announces Second Quarter Fiscal 2016 Results

Feb 16, 2016, 08:15 ET from Versar, Inc.

SPRINGFIELD, Va., Feb. 16, 2016 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the second quarter and six months ended January 1, 2016. 

Financial Results

Revenue for the second quarter of fiscal year 2016 increased 39% to $47.3 million, compared to revenues of $34.2 million during the second quarter of the last fiscal year and by 5% sequentially as compared to the fiscal first quarter of 2016.  Gross margin decreased to 8%, compared to 10% in the same prior year quarter, primarily due to product mix, but increased sequentially as compared to gross margin of 5% in the first quarter of fiscal 2016.  Selling, general and administrative expenses increased $0.4 million in the second quarter, primarily related to an estimated $0.6 million in costs associated with the Company's acquisition of VSS, as well as some other payroll-related items.  As a percentage of sales, SG&A expenses decreased to 7% compared to 9% in the second quarter of last year.  Net income for the quarter was $67,000 or $0.01 per share compared to net income of $277,000 or $0.03 per share in the same period of fiscal 2015.  

For the six months ended January 1, 2016, revenues increased 45% to $92.2 million compared to revenues of $63.7 million in the same period of fiscal 2015.    The Company reported a decrease in first half gross margin to 6% as compared to gross margin of 9% in the first half of fiscal 2015, related primarily to changes in our portfolio of contracts.  Selling, general and administrative expenses increased to $6.2 million in the first six months of 2016, including approximately $0.6 million in year to date costs associated with the VSS integration, but decreased to 7% of sales as compared to SG&A of $5.6 million or 8% of sales in the first six months of 2015.   Net loss for the first six months of fiscal 2016 was $363,000 or $0.04 per share as compared to net income of $190,000 or $0.02 per share in the first six months of fiscal 2015.

Tony Otten, CEO of Versar, said, "We delivered strong revenue growth in the second quarter of fiscal 2016, primarily driven by our Dover Air Force Base contract, a strategically important project for us that has broadened the Company's portfolio of capabilities.  Dover is a construction project, and as such, generates lower margins than the balance of our revenue. Sequentially, we saw a significant increase in gross margin with improved performance at both our Engineering & Construction Management business and in our Environmental Services Group.  Furthermore, with the acquisition and integration of VSS, we gained new, classified construction capabilities that position us to more effectively compete for higher margin projects."

Funded Backlog

As of January 1, 2016, Versar recorded funded backlog of approximately $193 million, as compared to $179 million of funded backlog at the end of fiscal year 2015.  Mr. Otten continued, "Funded backlog of $193 million as of January 1, 2016 represents an 8% increase as compared to funded backlog of $179 million at the close of fiscal 2015.  Our pipeline remains strong and we continue to see marketplace interest in our broad range of capabilities and our comprehensive, customized solutions."

Recent Awards

During the quarter, the Company was awarded a new task order valued at $7.1 million from the U.S. Army Corps of Engineers (USACE) Engineering and Support Center Huntsville, for the repair and upgrade of fire suppression systems in hangars at Joint Base Andrews in Maryland.  Additionally, the Company's joint venture between Geo-Marine/AECOM was awarded a $2.1 million task order under its Naval Facilities Engineering Command (NAVFAC) Natural Resources IDIQ contract, to develop predictive models to understand the dynamics of and define the source of sediment/material transportation near and adjacent to the Naval Submarine Base, Kings Bay, Georgia.

"Our diverse capabilities enable us to serve our customers by providing tailored solutions in challenging terrains and we've built a solid reputation on completing difficult assignments.  As we continue to strengthen our service offerings to meet marketplace demand, we believe we are well positioned to drive continued revenue growth, improved margins and sustained profitability," Mr. Otten concluded.   

Conference Call

The Company will hold a conference call at 2:00 PM Eastern Time today, Tuesday, February 16, to discuss the Company's operational performance and financial results for the fiscal second quarter ended January 1, 2016. 

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 of the teleconference will be available until March 1, 2016 and may be accessed domestically by dialing (877) 660-6853 and international callers may dial (201) 612-7415.  Callers must enter conference code number 13629617.  Additionally, the replay will be available on Versar's Investor Relations website, http://www.versar.com/investors/corporate.html.

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 engineering and construction management, environmental, and professional services.

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: 

Karin Weber

John Nesbett or Jennifer Belodeau


M&A/Investor Relations

Institutional Marketing Services (IMS)


Versar, Inc.

(203) 972-9200


(703) 642-6706

jnesbett@institutionalms.com


kweber@versar.com


 

 


VERSAR, INC. AND SUBSIDIARIES

 Condensed Consolidated Balance Sheets

(In thousands, except share amounts)



As of



January 1,
2016 (Unaudited)


June 26,
2015

ASSETS





Current assets





Cash and cash equivalents

$

3,718

$

2,109

Accounts receivable, net


45,574


57,171

Inventory, net


1,243


1,188

Prepaid expenses and other current assets


2,358


1,540

Deferred income taxes


1,412


1,366

Income tax receivable


1,190


2,373

Total current assets


55,495


65,747

Property and equipment, net


1,846


2,084

Deferred income taxes, non-current


449


414

Goodwill


34,299


16,066

Intangible assets, net


4,134


4,643

Other assets


49


252

Total assets

$

96,272

$

89,206






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities





Accounts payable

$

18,965

$

35,852

Accrued salaries and vacation


2,331


3,332

Line of Credit


14,660


-

Other current liabilities


5,563


1,114

Notes payable, current


5,406


2,313

Total current liabilities


46,925


42,611

Notes payable, non-current


4,057


5,835

Other long-term liabilities


6,391


1,390

 Total liabilities


57,373


49,836

Commitments and contingencies


-


-

Stockholders' equity





Common stock $.01 par value; 30,000,000 shares authorized;
10,132, 673 shares issued and 9,831,491 shares outstanding  as of January 1, 2016,
10,128,923 shares issued and 9,805,082 shares outstanding 
as of June  26, 2015.


102


101

Capital in excess of par value


30,889


30,798

Retained earnings


10,073


10,439

Treasury stock, at cost


(1,475)


(1,460)

Accumulated other comprehensive loss


(690)


(508)

Total stockholders' equity


38,898


39,370

Total liabilities and stockholders' equity

$

96,272

$

89,206






 

 

VERSAR, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share amounts)












For the Three Months
Ended


For the Six Months Ended



January
1, 2016


December
26, 2014


January
1, 2016


December
26, 2014










GROSS REVENUE

$

47,337

$

34,162

$

92,242

$

63,748

   Purchased services and materials, at cost


29,351


17,031


59,118


29,258

   Direct costs of services and overhead


14,366


13,682


27,192


28,434

GROSS PROFIT


3,620


3,449


5,932


6,056










   Selling, general and administrative expenses


3,317


2,925


6,170


5,616

   Other operating income


-


-


-


-

OPERATING INCOME (LOSS)


303


524


(238)


440










OTHER EXPENSE









   Interest expense


176


142


351


198

 (LOSS) BEFORE INCOME TAXES


127


382


(589)


242










   Income tax expense (benefit)


62


105


(224)


52










NET INCOME (LOSS) from continuing operations

$

65

$

277

$

(365)

$

190



-


-


-


-

NET INCOME (LOSS) 


67


277


(363)


190

NET INCOME (LOSS)  PER SHARE-BASIC and DILUTED

$

0.01

$

0.03

$

(0.04)

$

0.02










WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING-BASIC


9,850


9,775


9,831


9,742

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING-DILUTED


9,850


9,821


9,831


9,783










 

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SOURCE Versar, Inc.



RELATED LINKS

http://www.versar.com