Mastech Holdings, Inc. Reports Third Quarter 2012 Results And
Expands Share Repurchase Program
PITTSBURGH, Oct. 24, 2012 /PRNewswire/ -- Mastech
Holdings, Inc. (NYSE MKT: MHH), a national provider of Information
Technology and Specialized Healthcare staffing services, announced
today its financial results for the third quarter ended
September 30, 2012.
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Third Quarter Results:
Revenues for the third quarter of 2012 totaled $25.6 million, which represented a 9% increase
over the corresponding quarter last year and a slight improvement
over second quarter 2012 revenues. Sequential revenue growth
was achieved with one less billable day during the current quarter
and a lower utilization rate due to the impact of summer
vacations. Gross profit in the third quarter of 2012 was
$4.9 million compared to $4.6 million in the third quarter of 2011.
Consolidated net income for the third quarter 2012 totaled
$601,000, or $0.18 per diluted share, compared to $441,000, or $0.12
per diluted share, during the same period last year.
Demand for our staffing services remained solid. We were able to
grow our IT billable consultant-base by 8% during the quarter and
achieved sequential revenue growth for the ninth consecutive
quarter in our healthcare staffing business. Overall gross
margins in the third quarter were 19.1%, which was flat when
compared to the previous quarter and lower than the 19.8% gross
margins reported a year earlier. Lower permanent placement
revenues and supply-side pricing pressures on existing assignments
have impacted our gross margin performance in the current
quarter.
Kevin Horner, Mastech's Chief
Executive Officer stated, "Third quarter was a very positive
quarter for the Company on a number of fronts. We significantly
expanded our IT consultant-base during the quarter; we continued to
drive superior top-line revenue growth when compared to most of our
industry peers; and we delivered bottom-line earnings per share
results that were 50% greater than those of a year ago.
Operationally, we are starting to see some payback from investments
aimed at strengthening our recruitment capabilities. While we have
more work to do, I believe that our cost-effective, highly scalable
recruitment organization will play an important role in enhancing
the value proposition that we provide our clients."
Commenting on the Company's financial position, Jack Cronin, Mastech's Chief Financial Officer,
stated, "Our balance sheet remains strong with cash on hand of
$3.3 million; no outstanding debt;
and access to $15.0 million of
borrowing capacity. During the first nine months of 2012, we
spent $2.5 million to repurchase
436,026 shares of common stock under our share repurchase program.
At September 30, 2012 we had 171,088
shares still available for purchase under this program, which
originally authorized the repurchase of 750,000 shares and is set
to expire in December 2012. I'm
pleased to announce that our Board of Directors has elected to
increase the number of shares authorized to be purchased under this
program by 250,000 and has extended the duration of the program for
an additional two years, through December
22, 2014."
In conjunction with its third quarter earnings release, Mastech
will host a conference call at 9:00 A.M.
EDT on October 24, 2012 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 October 31, 2012.
About Mastech Holdings, Inc.:
Leveraging the power of 25 years of
IT experience, Mastech (NYSE MKT:
MHH) provides Information Technology Staffing services in
the disciplines which drive today's business operations
and Specialized Healthcare Staffing services to hospitals and other
healthcare facilities. More information about Mastech can be
found at Mastech's website: www.mastech.com.
Forward-Looking Statements:
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, 2011.
MASTECH
HOLDINGS, INC.
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(Amounts
in thousands)
|
(Unaudited)
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
3,253
|
|
$
5,755
|
Accounts receivable,
net
|
|
14,391
|
|
11,925
|
Prepaid and other current
assets
|
|
1,324
|
|
1,046
|
Deferred income
taxes
|
|
21
|
|
177
|
Total current assets
|
|
18,989
|
|
18,903
|
|
|
|
|
|
Equipment,
enterprise software and leasehold improvements, net
|
|
265
|
|
273
|
|
|
|
|
|
Goodwill
and intangible assets, net
|
|
436
|
|
458
|
|
|
|
|
|
Deferred financing costs, net
|
|
54
|
|
74
|
|
|
|
|
|
Deferred
income taxes
|
|
205
|
|
80
|
|
|
|
|
|
Total assets
|
|
$
19,949
|
|
$
19,788
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
|
$
1,907
|
|
$
2,309
|
Accrued payroll and related
costs
|
|
5,363
|
|
4,002
|
Deferred revenue and other
liabilities
|
|
428
|
|
430
|
Total current liabilities
|
|
7,698
|
|
6,741
|
|
|
|
|
|
Total liabilities
|
|
7,698
|
|
6,741
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Common stock, par value
$0.01 per share
|
|
38
|
|
37
|
Additional paid-in
capital
|
|
10,383
|
|
10,114
|
Retained earnings
|
|
4,873
|
|
3,462
|
Accumulated other
comprehensive income
|
|
45
|
|
-
|
Treasury stock, at
cost
|
|
(3,088)
|
|
(566)
|
Total shareholders' equity
|
|
12,251
|
|
13,047
|
Total liabilities and shareholders' equity
|
|
$
19,949
|
|
$
19,788
|
MASTECH
HOLDINGS, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(Amounts
in thousands, except per share data)
|
(Unaudited)
|
|
Three
Months ended September 30,
|
|
Nine
Months ended September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Revenues
|
$
25,629
|
|
$
23,489
|
|
$
75,395
|
|
$
65,505
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
20,744
|
|
18,840
|
|
61,221
|
|
52,574
|
|
|
|
|
|
|
|
|
Gross
profit
|
4,885
|
|
4,649
|
|
14,174
|
|
12,931
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
3,945
|
|
3,921
|
|
11,867
|
|
11,516
|
|
|
|
|
|
|
|
|
Income
from operations
|
940
|
|
728
|
|
2,307
|
|
1,415
|
|
|
|
|
|
|
|
|
Other
income/(expense), net
|
35
|
|
(18)
|
|
(21)
|
|
(32)
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
975
|
|
710
|
|
2,286
|
|
1,383
|
|
|
|
|
|
|
|
|
Income tax
expense
|
374
|
|
269
|
|
875
|
|
523
|
|
|
|
|
|
|
|
|
Net
income
|
$
601
|
|
$
441
|
|
$
1,411
|
|
$
860
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic
|
$
0.19
|
|
$
0.12
|
|
$
0.43
|
|
$
0.23
|
Diluted
|
$
0.18
|
|
$
0.12
|
|
$
0.42
|
|
$
0.23
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
3,176
|
|
3,657
|
|
3,271
|
|
3,673
|
Diluted
|
3,277
|
|
3,755
|
|
3,376
|
|
3,786
|
SOURCE Mastech Holdings, Inc.