Versar, Inc. Announces Second Quarter Fiscal 2015 Results
SPRINGFIELD, Va., Feb. 5, 2015 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fiscal second quarter and six months ended December 26, 2014.
Financial Results
Gross revenue for the second quarter of fiscal year 2015 increased 22% to $34.2 million, compared to revenues of $28.0 million during the second quarter of the last fiscal year. Sequentially, revenues increased 15% as compared to the first quarter of fiscal 2015. The Company reported gross margins of 10%, consistent with gross margins in the same prior year quarter. Net income for the quarter was $277,000 or $0.03 per share as compared to net income of $100,000 or $0.01 per share in the same period of fiscal 2014. In the second quarter of 2014, net income included $0.02 from discontinued operations and ($0.01) from continued operations.
Revenues for the six months ended December 26, 2014 increased 12% to $63.7 million as compared to revenues of $57.2 million in the same prior year period. The Company reported a decrease in first half gross margins to 10% as compared to gross margins of 11% in the first half of fiscal 2014, related primarily to the previously disclosed loss on a construction project managed out of our now closed Knoxville office and the continued wind down of Title II work in Afghanistan. Net income for the first six months of fiscal 2015 was $190,000 or $0.02 per share as compared to net income of $757,000 or $0.08 per share in the first six months of fiscal 2014.
Tony Otten, CEO of Versar, said, "We're pleased to have achieved strong second quarter results as we built on the momentum of the first quarter by delivering revenue growth, margin improvement and a return to profitability. Additionally during the quarter, SG&A expenses decreased as a percentage of sales and we expect to achieve additional efficiencies as we complete the integration of J.M. Waller. Funded backlog remains robust at $245 million, and demonstrates the marketplace recognition of our expanded capabilities, which have been enhanced through our acquisitions of both J.M. Waller and GMI. We expect to begin on-site work at Dover Air Force Base this week as part of our previously announced $98.3 million task order contract and continue to see a strong pipeline across each of our three core segments.
Increased Funded Backlog
As of December 26, 2014, Versar recorded funded backlog of approximately $245 million, an increase of 115% compared to $114 million of funded backlog at the end of fiscal year 2014.
During the quarter, Versar announced the award of two new task orders under its personal services contract in Afghanistan with a total value of $18.3 million; a $4.2 million contract to provide fence to fence environmental services at Barksdale Air Force Base in Louisiana and Columbus Air Force Base in Mississippi; a $3.5 million contract from the Air Force Reserve Command for Facilities Operations Capability and Utilization Surveys at several locations and a $2.6 million contract to provide construction manager as agent services for the new Department of State federal office building in Charleston, SC.
Following the close of the quarter, the Company's joint venture with Johnson Controls was awarded $6.1 million in design/build/repair task orders for electrical, water transmission and compressed air systems at the Kaena Point Satellite Tracking Station, Hawaii and at Laughlin Air Force Base, Texas. The joint venture was also awarded a $2 million contract to provide design/build construction services for upgrades and repairs at Camp Arifjan, Kuwait.
"We have built our business on our ability to provide a broad range of customized solutions for customers in any location or environment. Our recent acquisitions have enhanced our competitive advantage as demonstrated by our topline growth in the quarter and we are optimistic that we are well positioned to grow our customer base, further improve revenue and margin performance and sustain profitability through the balance of fiscal year 2015," Mr. Otten concluded.
Conference Call:
The Company will hold a conference call at 2:00 PM Eastern Time today, Thursday, February 5, to discuss the Company's operational performance and financial results for the fiscal second quarter and six months ended December 26, 2014.
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 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 professional services market areas.
VERSAR operates the corporate web sites, www.versar.com, and www.versarpps.com, and www.jmwaller.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 27, 2014, 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: |
David Gray |
John Nesbett or Jennifer Belodeau |
| Director of Financial Reporting |
Institutional Marketing Services (IMS) |
|
| Versar, Inc. |
(203) 972-9200 |
|
| (703) 642-6888 |
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| VERSAR, INC. AND SUBSIDIARIES |
||||
| Condensed Consolidated Balance Sheets |
||||
| (In thousands, except share amounts) |
||||
| As of |
||||
| December 26, |
June 27, |
|||
| ASSETS |
||||
| Current assets |
||||
| Cash and cash equivalents |
$ |
165 |
$ |
9,674 |
| Accounts receivable, net |
34,187 |
25,983 |
||
| Inventory, net |
1,428 |
1,294 |
||
| Prepaid expenses and other current assets |
1,745 |
1,303 |
||
| Deferred income taxes |
2,209 |
2,254 |
||
| Income tax receivable |
2,262 |
2,325 |
||
| Total current assets |
41,996 |
42,833 |
||
| Property and equipment, net |
2,413 |
2,389 |
||
| Deferred income taxes, non-current |
542 |
533 |
||
| Goodwill |
15,808 |
8,073 |
||
| Intangible assets, net |
5,171 |
2,930 |
||
| Other assets |
1,084 |
1,003 |
||
| Total assets |
$ |
67,014 |
$ |
57,761 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
| Current liabilities |
||||
| Accounts payable |
$ |
11,350 |
$ |
11,272 |
| Accrued salaries and vacation |
3,751 |
2,912 |
||
| Line of credit |
394 |
- |
||
| Other current liabilities |
2,206 |
3,568 |
||
| Notes payable, current |
2,166 |
958 |
||
| Total current liabilities |
19,867 |
18,710 |
||
| Notes payable, non-current |
8,093 |
156 |
||
| Other long-term liabilities |
1,126 |
1,110 |
||
| Total liabilities |
29,086 |
19,976 |
||
| Commitments and contingencies |
- |
- |
||
| Stockholders' equity |
||||
| Common stock $.01 par value; 30,000,000 shares authorized; |
101 |
100 |
||
| Capital in excess of par value |
30,615 |
30,393 |
||
| Retained earnings |
9,222 |
9,032 |
||
| Treasury stock, at cost |
(1,452) |
(1,396) |
||
| Accumulated other comprehensive loss; |
(558) |
(344) |
||
| Total stockholders' equity |
37,928 |
37,785 |
||
| Total liabilities and stockholders' equity |
$ |
67,014 |
$ |
57,761 |
| 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 |
||||||||
| December 26, |
December 27, |
December 26, |
December 27, |
||||||
| GROSS REVENUE |
$ |
34,162 |
$ |
28,037 |
$ |
63,748 |
$ |
57,158 |
|
| Purchased services and materials, |
17,031 |
14,359 |
29,258 |
28,769 |
|||||
| Direct costs of services and |
13,682 |
10,864 |
28,434 |
22,229 |
|||||
| GROSS PROFIT |
3,449 |
2,814 |
6,056 |
6,160 |
|||||
| Selling, general and |
2,925 |
2,898 |
5,616 |
5,161 |
|||||
| OPERATING INCOME (LOSS) |
524 |
(84) |
440 |
999 |
|||||
| OTHER EXPENSE |
|||||||||
| Interest income |
- |
(13) |
- |
(13) |
|||||
| Interest expense |
142 |
42 |
198 |
67 |
|||||
| INCOME (LOSS) BEFORE |
382 |
(113) |
242 |
945 |
|||||
| Income tax expense (benefit) |
105 |
(34) |
52 |
364 |
|||||
| NET INCOME (LOSS) from |
$ |
277 |
$ |
(79) |
$ |
190 |
$ |
581 |
|
| Income from discontinued |
- |
179 |
176 |
||||||
| NET INCOME |
277 |
100 |
190 |
757 |
|||||
| NET INCOME (LOSS) PER |
|||||||||
| Continuing operations |
$ |
0.03 |
$ |
(0.01) |
$ |
0.02 |
$ |
0.06 |
|
| Discontinued operations |
- |
0.02 |
- |
0.02 |
|||||
| NET INCOME PER SHARE- |
$ |
0.03 |
$ |
0.01 |
$ |
0.02 |
$ |
0.08 |
|
| WEIGHTED AVERAGE |
9,775 |
9,653 |
9,742 |
9,611 |
|||||
| WEIGHTED AVERAGE |
9,821 |
9,789 |
9,783 |
9,748 |
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SOURCE Versar, Inc.
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