CALABASAS, Calif., March 8, 2012 /PRNewswire/ -- National Technical Systems, Inc. (NASDAQ: NTSC) (NTS), a leading provider of testing and engineering services, today announced it expects Adjusted EBITDA for its new fiscal year ending January 31, 2013 will be between $20 million and $22 million with gross profit margin for the full fiscal year expected to be between 26.5 percent and 27.5 percent of revenues. The Company defines Adjusted EBITDA as earnings (net income) before interest, taxes, depreciation and amortization, as adjusted to eliminate the effects of stock-based compensation.
NTS President and Chief Executive Officer William C. McGinnis also reconfirmed the Company's previously announced revenue guidance for its fiscal year 2013 of $164 million to $169 million. In addition, McGinnis reconfirmed that the Company expects fiscal year 2013 sales, general and administrative (SG&A) expense to decline as a percentage of sales from fiscal year 2012 levels.
"We believe that Adjusted EBITDA is among the more important measures of performance in our industry. It approximates the cash flows generated by a business independent of a company's capital structure or tax position and, for that reason, it is a key factor for determining a company's valuation," McGinnis said. "As we grow NTS through our innovation and acquisition strategies, we are also concentrating on increasing the cost-effectiveness of our operations and driving substantial improvements in Adjusted EBITDA and net income."
McGinnis noted that as the economy recovers, the Company sees increasing growth opportunities in its telecommunications, energy and automotive businesses. "Additionally, with commercial aircraft production expected to ramp up, we believe our overall aerospace business will be positively impacted going forward," McGinnis added. "We also believe that the expected defense budgets cuts can create opportunities for us to grow our business in the defense sector, as cost reduction efforts often drive demand for outsourced testing, engineering services and supply chain management services, which are core competencies of NTS."
The foregoing guidance estimates reflect management's expectations based on assumptions about market conditions and the Company's past and future operating performance, which NTS believes are reasonable at this time. The Company's business involves procuring and performing on larger contracts. The timing of receipt of those contracts can have a significant impact on operating results for any quarter. Consequently, the Company's results may vary significantly from quarter to quarter. In addition, changes in macroeconomic conditions, delays in government spending and other factors can cause actual results to vary from expectations. See "Forward-Looking Statements" below.
NTS previously provided fiscal year 2013 guidance estimates for revenue and the expected SG&A trend for the new fiscal year on December 14, 2011, when it announced its financial results for its fiscal year 2012 third quarter and first nine months. At that time the Company said it would provide guidance for EBITDA and other selected financial measures for fiscal year 2013 early in the new fiscal year.
Announcement of Fiscal Year 2012 Fourth Quarter and Full Year Results
NTS expects to announce the Company's full year and fourth quarter results and file its annual report on Form 10-K for its fiscal year 2012 ended January 31, 2012, on or before April 30, 2012.
Non-GAAP Financial Measure – Adjusted EBITDA
This news release includes Adjusted EBITDA, which is a non-GAAP financial measure as defined by SEC Regulation G, that management believes is among the more important measures of performance in its industry because it provides insight into operating cash flows independent of a company's capital structure or tax position and is a key factor in determining a company's valuation. Management also believes Adjusted EBITDA provides a meaningful trend of operating performance, as well as a measure of liquidity and the Company's ability to service debt. Adjusted EBITDA should not be construed as a substitute for net income (loss) (as determined in accordance with GAAP) for the purpose of analyzing the Company's operating performance or financial position, as Adjusted EBITDA is not defined by GAAP.
NTS defines Adjusted EBITDA as earnings (net income) before interest, taxes, depreciation and amortization, as adjusted to eliminate the effects of stock-based compensation.
About National Technical Systems
National Technical Systems is a leading provider of testing and engineering services to the aerospace, defense, telecommunications, automotive, energy and high technology markets. Through a world-wide network of resources, NTS provides full product life-cycle support, offering world class design engineering, compliance, testing, certification, quality registration and program management. For additional information about NTS, visit our website at www.nts.com or call 800-270-2516.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, statements in this press release concerning future operations, plans or events are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward looking statements, including statements about the Company's anticipated future operating results, are based on management's expectations at this time. Actual results may vary significantly from those suggested by the forward-looking statements due to uncertainties and a number of important risk factors. Those factors include, but are not limited to, the risk factors noted in NTS' Annual Report on 10-K and other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. NTS undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect circumstances or unanticipated events occurring after the date of this release.