20% Year-Over-Year Revenue Growth from Continuing Operations;
58% Year-Over-Year Increase in Operating Profits from Continuing Operations;
54% Year-Over-Year Increase in Diluted Earnings Per Share from Continuing Operations;
3% Sequential Increase in Consultants on Billing.
Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology staffing services, announced today its financial results for the first quarter ended March 31, 2014.
First Quarter Results:
Revenues from continuing operations for the first quarter of 2014 totaled $28.7 million, which represented a 20% increase over the corresponding quarter last year. Gross profit from continuing operations in the first quarter of 2014 was $5.2 million compared to $4.4 million in the first quarter of 2013. Consolidated net income from continuing operations for the first quarter 2014 totaled $869,000 or $0.20 per diluted share, compared to $544,000 or $0.13 per diluted share, during the same period last year.
Demand for our IT staffing services was solid in the first quarter and largely in-line with activity levels of a quarter ago. Gross margins from continuing operations in the first quarter of 2014 were 18.2%, which equaled those reported a year earlier. Historically, gross margins in the first quarter are negatively impacted by higher payroll taxes and bench costs.
Kevin Horner, Mastech's Chief Executive Officer stated, "We are pleased to deliver strong year-over-year financial results in our traditionally challenging first quarter, as we were able to increase our billable consultant-base by approximately 3%. Operationally, we continue to strive for productivity gains in both our sales and recruitment organizations."
Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our financial position at March 31, 2014 remains strong, with short-term borrowings, net of cash balances on hand, of $1.1 million and over $15 million of available borrowing capacity under our existing credit facility. During the quarter we invested $2.6 million in operating working capital. This level of investment was in part due to an up-tick in our Days Sales Outstanding measurement during the quarter related to billing process changes at a major client. We are confident that DSO's will revert back to more normal levels in the second quarter of 2014."
In conjunction with its first quarter earnings release, Mastech will host a conference call at 9:00 A. M. ET on April 23, 2014 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 April 30, 2014.
About Mastech Holdings, Inc.:
Leveraging the power of 27 years of IT experience, Mastech (NYSE MKT: MHH) provides Information Technology Staffing services in the disciplines which drive today's business operations. More information about Mastech can be found at Mastech's website: www.mastech.com.
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, 2013.
MASTECH HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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Cash and cash equivalents
Accounts receivable, net
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Total current assets
Equipment, enterprise software and leasehold improvements, net
Deferred income taxes
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Common stock, par value $0.01 per share
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MASTECH HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months ended March 31,
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