Both the Data & Analytics and IT Staffing
Segments Achieved Double-Digit YOY Revenue Growth
PITTSBURGH, April 27,
2022 /PRNewswire/ -- Mastech Digital, Inc. (NYSE
American: MHH), a leading provider of Digital Transformation IT
Services, announced today its financial results for the first
quarter ending March 31, 2022.
First Quarter 2022 Highlights:
- The Company delivered record consolidated revenues in the first
quarter of 2022. Total revenues grew organically by 20% to
$59.8 million, compared to revenues
of $49.8 million in the 2021 first
quarter;
- The Company's Data and Analytics Services segment reported
revenues of $10.2 million, an organic
increase of 15% over last year's $8.8
million;
- The IT Staffing segment achieved record revenues of
$49.6 million and record gross
margins of 22.9% during the first quarter 2022. Top-line organic
growth totaled 21% compared to the first quarter of 2021;
- GAAP diluted earnings per share was $0.19 in the first quarter of 2022 compared to
$0.10 in the first quarter of 2021;
and
- Non-GAAP diluted earnings per share was $0.28 in the first quarter of 2022 compared to
$0.19 in the 2021 first quarter.
First Quarter 2022 Results:
Revenues for the first quarter of 2022 totaled $59.8 million compared to $49.8 million during the corresponding quarter of
2021. Gross profits in the first quarter of 2022 increased by
24% to $15.9 million from
$12.8 million in the same quarter of
2021. GAAP net income for the first quarter of 2022 totaled
$2.3 million or $0.19 per diluted share, compared to $1.2 million or $0.10 per diluted share during the same period of
2021. Non-GAAP net income for the first quarter of 2022 was
$3.3 million or $0.28 per diluted share, compared to $2.2 million or $0.19 per diluted share in the first quarter of
2021.
Activity levels at the Company's Data and Analytics Services
segment were solid, with order bookings of $11.8 million. Additionally, backlog increased
during the quarter. Demand for the Company's IT Staffing
Services segment remained elevated during the first quarter, as the
segment achieved record revenues and gross margins.
"2022 is off to a strong start with solid financial results in a
quarter that has historically been weak", said Vivek Gupta, the Company's President and Chief
Executive Officer. "Both of our business segments had
sequential revenue growth, strong year-over-year top-line growth
and solid operating profits. Additionally, we brought onboard
Ganeshan Venkateshwaran, a seasoned
leader with an impressive track record of successes in the digital
transformation services space, as the Chief Executive Officer of
our Data and Analytics Services segment. Ganeshan joins us
with a wealth of knowledge around advanced technologies and digital
transformation services to lead the next phase of growth for
Mastech InfoTellis."
About Mastech Digital, Inc.:
Mastech Digital (NYSE American: MHH) is a leading provider of
Digital Transformation IT Services. The Company offers Data
Management and Analytics Solutions, Digital Learning, and IT
Staffing Services with a Digital First approach. A
minority-owned enterprise, Mastech Digital is headquartered in
Pittsburgh, PA with offices across
the U.S., Canada, EMEA,
India and ASEAN.
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,
our July 2017 acquisition of the
services division of InfoTrellis, Inc. and our October 2020 acquisition of AmberLeaf Partners.
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.
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 and statements regarding the Company's
ability to generate 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
forecasted in forward-looking statements due to a variety of
factors, including, without limitation, the level of market demand
for the Company's 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, the
Company's ability to create, acquire and build new lines of
business, to attract and retain qualified personnel, reduce costs
and conserve cash, the extent to which the Company's business is
adversely affected by the impacts of
the COVID-19 pandemic and governmental responses to limit
the further spread of COVID-19 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, 2021.
For more information, contact:
Donna
Kijowski
Manager, Investor Relations
Mastech Digital, Inc.
888.330.5497
MASTECH DIGITAL,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
7,185
|
|
$
6,622
|
Accounts receivable,
net
|
|
46,838
|
|
43,393
|
Prepaid and other current
assets
|
|
3,191
|
|
3,890
|
Total current assets
|
|
57,214
|
|
53,905
|
|
|
|
|
|
Equipment, enterprise
software and leasehold improvements, net
|
|
3,540
|
|
3,038
|
|
|
|
|
|
Operating lease
right-of-use assets
|
|
5,033
|
|
4,894
|
|
|
|
|
|
|
|
|
|
|
Non-current
deposits
|
|
511
|
|
595
|
|
|
|
|
|
Goodwill, net of
impairment
|
|
32,510
|
|
32,510
|
|
|
|
|
|
Intangible assets, net
of amortization
|
|
17,968
|
|
18,760
|
Total assets
|
|
$
116,776
|
|
$
113,702
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of long-term
debt
|
|
$
4,400
|
|
$
4,400
|
Current portion of operating
lease liability
|
|
1,571
|
|
1,479
|
Accounts payable
|
|
6,242
|
|
4,954
|
Accrued payroll and related
costs
|
|
13,367
|
|
14,240
|
Other accrued
liabilities
|
|
1,222
|
|
1,771
|
Total current liabilities
|
|
26,802
|
|
26,844
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
Long-term debt, less current portion, net
|
|
7,252
|
|
8,334
|
Long-term operating lease liability, less current
portion
|
|
3,677
|
|
3,706
|
Long-term accrued income taxes
|
|
125
|
|
125
|
Deferred income taxes
|
|
888
|
|
265
|
Total liabilities
|
|
38,744
|
|
39,274
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common stock, par value
$0.01 per share
|
|
133
|
|
131
|
Additional paid-in
capital
|
|
29,667
|
|
28,250
|
Retained earnings
|
|
53,173
|
|
50,841
|
Accumulated other
comprehensive income (loss)
|
|
(754)
|
|
(607)
|
Treasury stock, at
cost
|
|
(4,187)
|
|
(4,187)
|
Total shareholders' equity
|
|
78,032
|
|
74,428
|
Total liabilities and shareholders' equity
|
|
$
116,776
|
|
$
113,702
|
|
|
|
|
|
MASTECH DIGITAL,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Amounts in thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months ended
March 31,
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
Revenues
|
|
$
59,755
|
|
$
49,775
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
43,823
|
|
36,971
|
|
|
|
|
|
|
|
Gross profit
|
|
15,932
|
|
12,804
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
12,625
|
|
10,935
|
|
|
|
|
|
|
|
Income from
operations
|
|
3,307
|
|
1,869
|
|
|
|
|
|
|
|
Other income/(expense),
net
|
|
(60)
|
|
(232)
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
3,247
|
|
1,637
|
|
|
|
|
|
|
|
Income tax
expense
|
|
915
|
|
443
|
|
Net income
|
|
$
2,332
|
|
$
1,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share:
|
|
|
|
|
|
Basic
|
|
$
0.20
|
|
$
0.10
|
|
Diluted
|
|
$
0.19
|
|
$
0.10
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
Basic
|
|
11,509
|
|
11,415
|
|
Diluted
|
|
12,035
|
|
11,997
|
|
|
|
|
|
|
|
MASTECH DIGITAL,
INC.
|
RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
|
(Amounts in thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months ended
March 31,
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
GAAP Net
Income
|
|
$
2,332
|
|
$
1,194
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Amortization of
acquired intangible assets
|
|
792
|
|
793
|
|
Stock-based
compensation
|
|
526
|
|
621
|
|
Income taxes
adjustments
|
|
(340)
|
|
(365)
|
Non-GAAP Net
Income
|
|
$
3,310
|
|
$
2,243
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
Earnings Per Share
|
|
$
0.19
|
|
$
0.10
|
Non-GAAP Diluted
Earnings Per Share
|
|
$
0.28
|
|
$
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
GAAP Diluted
Shares
|
|
12,035
|
|
11,997
|
Non-GAAP Diluted
Shares
|
|
12,035
|
|
11,997
|
|
|
|
|
|
|
MASTECH DIGITAL, INC.
|
SUPPLEMENTAL FINANCIAL
INFORMATION
|
(Amounts in thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months ended March 31,
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
Data and analytics
services
|
$
10,152
|
|
$
8,794
|
|
IT staffing
services
|
49,603
|
|
40,981
|
|
|
Total revenues
|
$
59,755
|
|
$
49,775
|
|
|
|
|
|
|
Gross Margin %:
|
|
|
|
|
Data and analytics
services
|
45.2%
|
|
45.7%
|
|
IT staffing
services
|
22.9%
|
|
21.4%
|
|
|
Total gross margin %
|
26.7%
|
|
25.7%
|
|
|
|
|
|
|
Segment Operating Income:
|
|
|
|
|
Data and analytics
services
|
$
972
|
|
$
394
|
|
IT staffing
services
|
3,127
|
|
2,268
|
|
|
Subtotal
|
4,099
|
|
2,662
|
|
|
|
|
|
|
Amortization of
acquired intangible assets
|
(792)
|
|
(793)
|
Interest expense and
other, net
|
(60)
|
|
(232)
|
Income before income
taxes
|
$
3,247
|
|
$
1,637
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/mastech-digital-reports-20-increase-in-revenues-in-the-first-quarter-2022-301533980.html
SOURCE Mastech Digital, Inc.