Versar, Inc. Announces First Quarter Fiscal 2013 Results
Reports Improved Backlog, Net Income and Gross Margins
SPRINGFIELD, Va., Nov. 8, 2012 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fiscal first quarter ended September 28, 2012.
Net income for the first quarter of fiscal year 2013 was $0.85 million, an increase of 3% compared to net income of $0.82 million in the first quarter of fiscal year 2012. Earnings per share were $0.09 per basic and diluted share.
The Company achieved gross margins of 14% in the first quarter as compared to 11% in the same quarter last year and operating income margins improved to 5.9% from 4.1% in the same quarter last year. The improved margins were largely due to the Company's continued focus on controlling costs and improving project management.
Gross revenue for the first quarter of fiscal year 2013 was $23.6 million, a decrease of 29% compared to revenue of $33.3 million reported in the first quarter of fiscal year 2012. This decrease was primarily attributable to lower domestic revenue of $4 million related to Versar's completion of the Tooele Chemical Demilitarization project in fiscal year 2012, reduced company activity in Iraq and Afghanistan and delays in new awards that were not realized until the end of the U.S. government's fiscal year.
As of September 28, 2012, Versar recorded funded backlog of approximately $106 million, an increase of 24% compared to approximately $84 million at September 30, 2011 and an 11.8% increase when compared to the $93 million of backlog at the end of fiscal year 2012. This increase was due largely to new performance-based remediation ("PBR") awards for the U.S Air Force at various installations across the United States. Subsequent to the end of Versar's quarter, additional awards were received prior to the end of the U.S. government's fiscal year and, as of October 1, 2012, the company's backlog reached $122 million, driven by task orders under a new prime contract with the U.S. Army Corps of Engineers (USACE) for up to $170 million for personal services in Afghanistan.
Tony Otten, CEO of Versar said, "Our ninth consecutive quarter of improved margins is characterized by solid profitability coupled with one of the highest funded backlog totals in our 43-year history. Our investment in business development is paying off – during the quarter we announced two new PBR contracts for up to $7 million and $25 million for air force bases in the Front Range and Great Lakes regions, respectively, and the two year $9.7 million extension of our Professional Services work at Joint Base Lewis McChord. Following the close of the first quarter, we announced a new prime contract with a maximum capacity of $170 million, with the U.S. Army Corps of Engineers Middle East District, to perform on-site construction management support services for assigned projects supporting two USACE Engineer Districts in Afghanistan. We are also pleased to report that our integration of Charron Consulting, a strategically attractive U.S.-focused project and construction management company that we acquired in May 2012, is now complete and meeting our pro-forma financial expectations."
Mr. Otten continued, "Due to the financial successes achieved in fiscal year 2012 and prior fiscal years, our balance sheet is strong. We generate strong free cash flow and our cash position now stands at $10.6 million with working capital of $23 million. We remain well positioned to drive organic growth and to pursue our acquisition strategy."
Conference Call:
The Company will host a conference call today, November 8, 2012 at 2:00 p.m. Eastern Time to discuss its operational performance and financial results. The conference call may be accessed in the U.S. and Canada by dialing toll-free (877) 407-8033. International callers may access the call by dialing (201) 689-8033.
Participants should call in a few minutes before 2:00 p.m. Eastern Time. For those unable to attend the conference call, replays 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 telecommunication and technology integration market areas.
VERSAR operates a number of web sites, including the corporate web sites, www.versar.com, www.geomet.com, www.viap.com, www.dtaps.com, www.adventenv.com, www.charronconsulting.com, and www.ppsgb.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 29, 2012, 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.
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| Contact: |
Michael J. Abram |
John Nesbett or Jennifer Belodeau |
| Senior Vice President |
Institutional Marketing Services (IMS) |
|
| Versar, Inc. |
(203) 972-9200 |
|
| (703) 642-6706 |
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| VERSAR, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share amounts) |
||||
| As of |
||||
| September 28, 2012 |
June 29, 2012 |
|||
| (unaudited) |
||||
| ASSETS |
||||
| Current assets |
||||
| Cash and cash equivalents |
$ |
10,589 |
$ |
8,012 |
| Accounts receivable, net |
19,826 |
25,598 |
||
| Inventory |
1,389 |
1,428 |
||
| Prepaid expenses and other current assets |
1,701 |
1,938 |
||
| Tax receivable |
105 |
--- |
||
| Deferred income taxes |
2,158 |
2,305 |
||
| Total current assets |
35,768 |
39,281 |
||
| Property and equipment, net |
3,088 |
3,341 |
||
| Deferred income taxes, non-current |
5 |
193 |
||
| Goodwill |
7,515 |
7,418 |
||
| Intangible assets, net |
2,208 |
2,283 |
||
| Other assets |
894 |
861 |
||
| Total assets |
$ |
49,478 |
$ |
53,377 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
| Current liabilities |
||||
| Accounts payable |
$ |
3,901 |
$ |
5,415 |
| Accrued salaries and vacation |
2,553 |
3,124 |
||
| Other current liabilities |
5,763 |
7,409 |
||
| Income tax payable |
--- |
677 |
||
| Notes payable, current |
250 |
333 |
||
| Total current liabilities |
12,467 |
16,958 |
||
| Notes payable, non-current |
667 |
667 |
||
| Deferred income taxes |
79 |
332 |
||
| Other long-term liabilities |
1,058 |
1,037 |
||
| Total liabilities |
14,271 |
18,994 |
||
| Commitments and contingencies |
||||
| Stockholders' equity |
||||
| Common stock, $.01 par value; 30,000,000 shares |
||||
| authorized; 9,723,399 shares and 9,645,149 shares issued; 9,458,825 shares and 9,391,575 shares outstanding |
97 |
96 |
||
| Capital in excess of par value |
29,209 |
29,047 |
||
| Retained earnings |
7,808 |
6,963 |
||
| Treasury stock, at cost (264,574 and 253,574 shares, respectively) |
(1,202) |
(1,166) |
||
| Accumulated other comprehensive loss; foreign currency translation |
(705) |
(557) |
||
| Total stockholders' equity |
35,207 |
34,383 |
||
| Total liabilities and stockholders' equity |
$ |
49,478 |
$ |
53,377 |
| VERSAR, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited - in thousands, except share amounts) |
||||||
| For the Three-Months Ended |
||||||
| September 28, 2012 |
September 30, 2011 |
|||||
| GROSS REVENUE |
$ |
23,551 |
$ |
33,284 |
||
| Purchased services and materials, at cost |
8,325 |
16,158 |
||||
| Direct costs of services and overhead |
11,913 |
13,393 |
||||
| GROSS PROFIT |
3,313 |
3,733 |
||||
| Selling, general and administrative expenses |
1,925 |
2,352 |
||||
| Other expense |
--- |
34 |
||||
| OPERATING INCOME |
1,388 |
1,347 |
||||
| OTHER (INCOME) EXPENSE |
||||||
| Interest (income) |
(1) |
(29) |
||||
| Interest expense |
24 |
60 |
||||
| INCOME BEFORE INCOME TAXES |
1,365 |
1,316 |
||||
| Income tax expense |
520 |
492 |
||||
| NET INCOME |
$ |
845 |
$ |
824 |
||
| NET INCOME PER SHARE – BASIC |
$ |
0.09 |
$ |
0.09 |
||
|
NET INCOME PER SHARE – DILUTED |
$ |
0.09 |
$ |
0.09 |
||
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |
||||||
| – BASIC |
9,392 |
9,341 |
||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |
||||||
| – DILUTED |
9,424 |
9,356 |
||||
SOURCE Versar, Inc.
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