Versar, Inc. Announces FY 2012 Financial Results

SPRINGFIELD, Va., Sept. 18, 2012 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fourth quarter and fiscal year ended June 29, 2012.  Net Income for fiscal year 2012 was $4.2 million or $0.45 per basic and diluted share, compared to $3.4 million or $0.37 per basic and diluted share in fiscal year 2011.

Gross profit in fiscal year 2012 increased 12% to $16 million, or 13% of gross revenue, compared to gross profit of $14.3 million or 10% of gross revenue in fiscal year 2011.  Operating income increased 31% in fiscal year 2012 to $7.7 million from $5.9 million in fiscal year 2011.  FY 2012 gross profit and operating income were the highest ever reported in our 43-year history. The improvements were due to higher margin revenue and relatively flat overhead and selling, general and administrative expenses.  

Gross revenue for fiscal year 2012, of $119 million, decreased 14% compared to $137.6 million in fiscal year 2011.  The decrease in gross revenue was primarily attributable to a non-recurring equipment purchase of approximately $8.4 million from our Tooele Chemical Demilitarization project in Utah, recorded and announced in the second quarter of fiscal year 2011.  Additionally, the Company had fewer project awards in our Environmental Services business segment during the 2012 fiscal year.  

As of June 29, 2012, Versar recorded funded backlog of approximately $93 million, an increase of 19% compared to $78 million of funded backlog at July 1, 2011. This increase reflected the award of several large long term contracts and was indicative of the high quality proposals that were developed as a result of proposal preparation staff training and business development investments earlier this fiscal year.  This increase also included funded backlog of approximately $7 million contributed by Charron Construction Consulting, Inc., which we acquired in May 2012. 

Versar closed fiscal year 2012 with a cash balance of approximately $8 million, working capital of $22.3 million, and stockholders' equity of $34.4 million, a 14% increase in stockholders' equity compared to last year.

For the fourth quarter of fiscal year 2012, Versar earned net income of $1.6 million, or $0.17 per basic and diluted share compared to net income of $1.4 million, or $0.14 per share in the fourth quarter of fiscal year 2011, an increase of 14% on net income and 21% on earnings per share, respectively.  Gross profit in the current quarter improved 18% to $4.5 million, or 16% of gross revenue, compared to gross profit of $3.8 million, or 11% of gross revenue in the fourth quarter of last fiscal year.  Quarter over quarter operating income improved 23% to $2.7 million compared to $2.2 million in the fourth quarter of last fiscal year. The improved margins were largely due to higher margin revenue in this fiscal year's fourth quarter compared to last fiscal year and our continued focus on controlling fixed costs. 

Gross revenue for the fourth quarter of fiscal year 2012 was $28.7 million, a decrease of 18% compared to revenue of $34.9 million reported in the same quarter of fiscal year 2011.  The decrease in gross revenue was primarily attributable to reduced activity from our projects in Iraq and lower revenue from our Environmental Services business segment. 

Tony Otten, CEO of Versar said, "Despite a challenging economic environment, we reported our eighth fiscal quarter in a row of improved margins and higher income and finished FY 2012 with the highest gross profit and operating income in our history.  We have clearly achieved our goals of improving operating margins and gross profit by focusing on opportunities where funding is non-discretionary such as sustainable range management, unexploded ordnance and performance based remediation.  In fact, since the close of the fiscal year, we've announced our selection to participate on two significant performance based remediation contracts in support of the Air Force Center for Engineering and the Environment for the Front Range Group and the Great Lakes Region, respectively."      

Mr. Otten continued, "During the course of the 2012 fiscal year, following an evaluation of the operational efficiency of our four business segments, we eliminated one segment and realigned its operations to two other existing business segments.  Our business is now organized into three categories: Engineering and Construction Management, Environmental Services and Professional Services.  We believe this realignment will increase efficiencies and streamline our operations to better meet the needs of our existing customers and allow us to respond to the challenges presented by the global economy while also providing us the flexibility to more effectively pursue new opportunities.  We remain focused on profitable revenue growth and our acquisition of Charron, a strategically attractive U.S.-focused program, project and construction management company, allows us to leverage our international Title II Engineering capabilities stateside.  Looking forward, we believe that our strong balance sheet will continue to provide a solid platform for the growth of our Company both organically and through M&A opportunities."

Conference Call:

The Company will host a conference call today, September 18, 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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SOURCE Versar, Inc.