PITTSBURGH, April 26, 2017 /PRNewswire/ -- Mastech Digital,
Inc. (NYSE MKT: MHH), a national provider of Information Technology
staffing and Digital Transformation services, announced today its
financial results for the first quarter of 2017.
First Quarter 2017 Highlights:
- Revenues totaled $33.1 million,
an increase of $1.4 million over last
year's top-line results and $0.7
million over fourth quarter 2016's results;
- Billable consultants at March 31,
2017 totaled 893 compared to 854-consultants at March 31, 2016;
- GAAP diluted earnings per share were $0.04 versus $0.00
in the 2016 first quarter; and
- Non-GAAP diluted earnings per share were $0.09 versus $0.16
in the 2016 first quarter as the Company continued to invest for
future growth.
First Quarter Results:
Revenues for the first quarter
of 2017 totaled $33.1 million
compared to $31.7 million during the
corresponding quarter last year. Gross profit in the first
quarter of 2017 was $6.2 million,
compared to $6.1 million in the first
quarter of 2016. GAAP net income for the first quarter of 2017
totaled $201,000 or $0.04 per diluted share, compared to $11,000 or $0.00
per diluted share during the same period last year. Non-GAAP
net income for the first quarter of 2017 was $394,000 or $0.09
per diluted share, compared to $692,000 or $0.16
per diluted share in the first quarter of 2016.
Demand for the Company's staffing services increased during the
first quarter of 2017 from the previous quarter and we were able to
expand our billable consultant-base in the quarter.
Commenting on the Company's 2017 first quarter results,
Vivek Gupta, Mastech Digital's Chief
Executive Officer stated, "It was satisfying to see higher levels
of activity during the quarter and our ability to grow revenues and
consultants-on-billing both year-over-year and
sequentially. During the quarter, we continued to invest in
our sales and recruitment organizations, which positions us to take
full advantage of growth opportunities in the subsequent quarters
of 2017."
Commenting on the Company's financial position, Jack Cronin, Mastech Digital's Chief Financial
Officer, stated, "At March 31, 2017,
we had bank debt, net of cash balances on hand, of $12.4 million and approximately $9.6 million of borrowing capacity available to
us under our revolving credit line. During the quarter, the
increase in bank debt largely reflected an investment in operating
working capital to support our growth."
In conjunction with its first quarter earnings release, Mastech
Digital will host a conference call at 9:00
A.M. ET on April 26, 2017 to
discuss these results and to answer questions. A live webcast
of this conference call will be available on the Company's website,
www.mastechdigital.com. Simply click on the Investor Section
and follow the links to the live webcast. The webcast will
remain available for replay through May 3,
2017.
About Mastech Digital, Inc.:
Mastech Digital (NYSE MKT: MHH) is a national provider of IT
staffing and digital transformation services focused on solving its
customers' digital transformation challenges. The Company's IT
staffing services span across digital and legacy technologies while
its digital transformation services include Salesforce.com,
SAP HANA and digital learning services. A minority-owned
enterprise, Mastech Digital is headquartered in Pittsburgh, PA with offices across the U.S.
and India. For more information,
visit www.mastechdigital.com.
Use of non-GAAP Measures:
This press release contains non-GAAP financial measures to
supplement our financial results presented on a GAAP basis.
The presentation of these financial measures is not intended to be
considered in isolation or as a substitute for, or superior to,
financial information prepared and presented in accordance with
GAAP. Investors are cautioned that there are material
limitations associated with the use of non-GAAP financial measures
as an analytical tool. Reconciliations of these non-GAAP
measures to their comparable GAAP measures are included in the
attached financial tables.
We believe that providing non-GAAP net income and non-GAAP
diluted earnings per share offers investors useful supplemental
information about the financial performance of our business,
enables comparison of financial results between periods where
certain items may vary independent of business performance, and
allows for greater transparency with respect to key metrics used by
management in operating our business. Additionally,
management uses these non-GAAP financial measures in
evaluating the Company's performance.
Specifically, the non-GAAP financial measures contained herein
exclude the following expense items:
Amortization of acquired intangible assets: We
amortize intangible assets acquired in connection with our
June 2015 acquisition of Hudson
IT. We exclude these amortization expenses in our non-GAAP
financial measures because we believe it allows investors to make
more meaningful comparisons between our operating results and those
of other companies within our industry and facilitates a helpful
comparison of our results with other periods.
Stock-based compensation expenses: We incur
material recurring expense related to non-cash, stock-based
compensation. We exclude these expenses in our non-GAAP financial
measures because we believe that it provides investors with
meaningful supplemental information regarding operational
performance. In particular, because of varying available
valuation methodologies, subjective assumptions and the variety of
award types that companies can use under ASC 718, we believe that
providing non-GAAP financial measures that exclude these expenses
allows investors to make more meaningful comparisons between our
operating results and those of other companies within our industry
and facilitates comparison of our results with other periods.
Severance charges: From time to time, we incur
severance expense related to the termination by the Company of
leadership personnel. While it is probable that these
expenses will occur in the future, we believe that providing
non-GAAP financial measures that exclude these expenses are useful
for investors to understand the effects of these items on our total
operating expenses and facilitate comparison of our results with
other periods.
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 (i) projections of revenues, earnings, and cash flow,
and (ii) the expected completion of the acquisition, the time frame
in which this will occur, the expected benefits to Mastech Digital
from completing the acquisition and the expected performance of
Mastech Digital following completion of the acquisition.
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, 2016.
MASTECH DIGITAL,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
876
|
|
$
829
|
Accounts receivable,
net
|
|
23,377
|
|
21,102
|
Prepaid and other current
assets
|
|
771
|
|
753
|
Total current assets
|
|
25,024
|
|
22,684
|
|
|
|
|
|
Equipment, enterprise
software and leasehold improvements, net
|
|
542
|
|
558
|
|
|
|
|
|
Deferred income
taxes
|
|
246
|
|
254
|
|
|
|
|
|
Deferred
financing costs, net
|
|
50
|
|
59
|
|
|
|
|
|
Non-current
deposits
|
|
176
|
|
170
|
|
|
|
|
|
Goodwill
|
|
8,427
|
|
8,427
|
|
|
|
|
|
Intangible assets,
net
|
|
7,110
|
|
7,313
|
Total assets
|
|
$
41,575
|
|
$
39,465
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of long-term
debt
|
|
$
1,800
|
|
$
1,800
|
Accounts payable
|
|
2,952
|
|
1,963
|
Accrued payroll and related
costs
|
|
5,280
|
|
7,645
|
Deferred revenue and other
liabilities
|
|
677
|
|
849
|
Total current liabilities
|
|
10,709
|
|
12,257
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
Long-term debt, less current
portion
|
|
11,480
|
|
8,136
|
Total liabilities
|
|
22,189
|
|
20,393
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common stock, par value
$0.01 per share
|
|
53
|
|
53
|
Additional paid-in
capital
|
|
13,970
|
|
13,863
|
Retained earnings
|
|
9,498
|
|
9,297
|
Accumulated other
comprehensive (loss)
|
|
(1)
|
|
(7)
|
Treasury stock, at
cost
|
|
(4,134)
|
|
(4,134)
|
Total shareholders' equity
|
|
19,386
|
|
19,072
|
Total liabilities and shareholders' equity
|
|
$
41,575
|
|
$
39,465
|
MASTECH DIGITAL,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Amounts in
thousands, except per share data)
|
(Unaudited)
|
|
Three Months ended
March 31,
|
|
2017
|
|
2016
|
|
|
|
|
Revenues
|
$
33,100
|
|
$
31,714
|
|
|
|
|
Cost of
revenues
|
26,891
|
|
25,601
|
|
|
|
|
Gross
profit
|
6,209
|
|
6,113
|
|
|
|
|
Selling, general and
administrative expenses
|
5,806
|
|
5,978
|
|
|
|
|
Income from
operations
|
403
|
|
135
|
|
|
|
|
Other
income/(expense), net
|
(81)
|
|
(118)
|
|
|
|
|
Income before
income taxes
|
322
|
|
17
|
|
|
|
|
Income tax
expense
|
121
|
|
6
|
Net
income
|
$
201
|
|
$
11
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
$
0.04
|
|
$
0.00
|
Diluted
|
$
0.04
|
|
$
0.00
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
4,499
|
|
4,353
|
Diluted
|
4,561
|
|
4,450
|
MASTECH DIGITAL,
INC.
|
RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
|
(Amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
Three Months ended
March 31,
|
|
2017
|
|
2016
|
|
|
|
|
GAAP Net
Income
|
$
201
|
|
$
11
|
|
|
|
|
Adjustments:
|
|
|
|
Amortization of
acquired intangible assets
|
203
|
|
203
|
Stock-based
compensation
|
107
|
|
115
|
Severance
expenses
|
-
|
|
780
|
Income taxes
adjustments
|
(117)
|
|
(417)
|
Non-GAAP Net
Income
|
$
394
|
|
$
692
|
|
|
|
|
|
|
|
|
GAAP Diluted
Earnings Per Share
|
$
0.04
|
|
$
0.00
|
Non-GAAP Diluted
Earnings Per Share
|
$
0.09
|
|
$
0.16
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
GAAP Diluted
Shares
|
4,561
|
|
4,450
|
Non-GAAP Diluted
Shares
|
4,561
|
|
4,450
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mastech-digital-inc-reports-first-quarter-2017-results---revenues-grow-by-44-year-over-year-and-22-sequentially-300445622.html
SOURCE Mastech Digital, Inc.