Fortress International Group Inc. (NASDAQ: FIGI) (NASDAQ: FIGIU)
(NASDAQ: FIGIW), a company providing comprehensive services for the
planning, design, development and maintenance of mission critical
facilities and information infrastructure, today announced
financial results for the 2008 fiscal year.
For the three-month period ended December 31, 2008, the Company
reported revenue of $37.2 million, compared to revenue of $18.2
million for the three-month period ended December 31, 2007. The
Company recorded in the fourth quarter of 2008 an impairment loss
on goodwill and other intangibles of $21.8 million. As a result,
the net loss for the fourth quarter of 2008 was $21.4 million, or
$1.70 per basic and diluted share, compared to a net loss of $1.2
million, or $0.10 per basic and diluted share, for the fourth
quarter of 2007. Adjusted EBITDA for the fourth quarter ended
December 31, 2008 was approximately $1.9 million, compared to an
adjusted EBITDA loss of $0.5 million for the fourth quarter
2007.
For the year ended December 31, 2008, the Company reported
revenues of $102.5 million and a net loss of $32.9 million, or
$2.68 per basic and diluted share, compared to revenue of $50.5
million, and a net loss of $7.4 million, or $0.63 per basic and
diluted share, for the year ended December 31, 2007. The 2008
results included a total of $26.0 million of impairment loss on
goodwill and other intangibles. The adjusted EBITDA loss for the
year ended December 31, 2008 was approximately $0.8 million,
compared to an adjusted EBITDA loss of $4.3 million for the year
ended December 31, 2007.
The Company reported backlog totaled $63.1 million as of
December 31, 2008. Backlog reflects new additions, less revenue
earned, and any adjustments for cancellation. Our backlog was
reduced significantly from the third quarter of 2008 due to the
recent indication by our most significant customer of its
suspension of two projects, totaling $145.0 million.
Commenting on the financial results, Chief Financial Officer,
Timothy C. Dec said, "We announced in August of 2008 that it was
our objective to achieve adjusted EBITDA profitability, and we
started achieving that in the third and fourth quarter with
stronger results. As it is, our cash flow was positive in the
fourth quarter of 2008 and were it not for the impairment loss, our
fourth quarter would have included a slight net profit. As we have
previously announced, we took steps in 2008 to stabilize our cost
structure after our investments in sales and marketing and the
requirements for being a public company. Our selling, general and
administrative expenses, excluding non-cash compensation, as a
percentage of total revenues declined to 9.4% in the fourth quarter
of 2008 from 22.7% in the fourth quarter of 2007 and our revenues
have increased more than 100% year over year. Our cash level at the
end of the year was $12.4 million."
Commenting on the results, Chief Executive Officer Thomas P.
Rosato said, "We are happy to report we have continued the momentum
we achieved in the third quarter with another quarter of positive
adjusted EBITDA during these difficult economic times. Growth in
our various products continues to track our expectations with each
product showing strong year over year growth -- 32% for Technical
Consulting, 140% for Construction Management and 42% for Facilities
Management. As we enter into 2009, we have positioned our corporate
services to focus on four primary areas: energy related
initiatives, real estate solutions, capital solutions and IT
related initiatives. We believe these areas hold the greatest
potential for customers to invest in the coming months and years as
solutions in these areas result in ultimate cost savings to the
customer. We do see continued demand in our industry for data
center environments and, the lack of capital is creating a
tremendous amount of pent up demand that we believe may be released
as the credit markets loosen up."
The Company will conduct a conference call to discuss the
financial results on Thursday, March 26, 2009, at 8:30 a.m.,
Eastern Time. Investors may access the live call by dialing
877-879-6174 five minutes before the start of the call. Investors
may also access the call via the Internet at:
www.thefigi.com
The webcast and conference call will be archived after its
completion and will remain available through April 2, 2009 by
dialing 888-203-1112 and entering replay passcode 4372934.
Use of Non-GAAP Financial Measures
The Company defines adjusted EBITDA as earnings before non-cash
stock-based compensation, interest, taxes, depreciation and
amortization and loss on goodwill and other intangibles. The
Company uses adjusted EBITDA as a measure of the Company's
operating trends. Investors are cautioned that adjusted EBITDA is
not a measure of liquidity or of financial performance under
Generally Accepted Accounting Principles in the United States
(GAAP). The adjusted EBITDA numbers presented may not be comparable
to similarly titled measures reported by other companies. Adjusted
EBITDA, while providing useful information, should not be
considered in isolation or as an alternative to net income or cash
flows as determined under GAAP. Consistent with Regulation G under
the U.S. federal securities laws, the non-GAAP measures in this
press release have been reconciled to the nearest GAAP measure, and
this reconciliation is located under the heading "Adjusted EBITDA
Reconciliation" following the Consolidated Statements of Operations
included in this press release.
ABOUT FORTRESS INTERNATIONAL GROUP, INC.
Fortress International Group, Inc. is leading mission-critical
facilities into a new era of maximum uptime and efficiency. By
combining the knowledge and experience of Total Site Solutions and
Rubicon Professional Services, two experts in critical facilities
infrastructure, Fortress International provides Consulting and
Engineering, Construction Management and 24/7/365 Site Services for
the world's most technology dependent organizations. Serving as a
trusted advisor, Fortress delivers the strategic guidance and
pre-planning that makes every stage of the critical facility
lifecycle more efficient. For those who own, lease or manage
mission-critical facilities, Fortress provides innovative
end-to-end capital management, energy, IT strategy, procurement,
design, construction, implementation and operations solutions that
optimize performance and reduce cost. Fortress International Group,
Inc. -- setting a new standard for the optimized critical
facility.
Fortress International Group, Inc. (NASDAQ: FIGI) (NASDAQ:
FIGIU) (NASDAQ: FIGIW) is headquartered in Maryland, with offices
throughout the US. For more information, visit: www.thefigi.com or
call 888-321-4877.
FORWARD-LOOKING STATEMENTS
This document may contain "forward-looking statements" -- that
is, statements related to future -- not past -- events, plans, and
prospects. In this context, forward-looking statements may address
matters such as our expected future business and financial
performance, and often contain words such as "guidance," "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "should,"
or "will." Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. Particular
uncertainties that could adversely or positively affect the
Company's future results include: the Company's reliance on a
significant portion of its revenues from a limited number of
customers; the uncertainty as to whether the Company can replace
its declining backlog; risks involved in properly managing complex
projects; risks relating to revenues under customer contracts, many
of which can be canceled on short notice; risks related to the
implementation of the Company's strategic plan, including the
ability to make acquisitions and the performance and future
integration of acquired businesses; and other risks and
uncertainties disclosed in the Company's filings with the
Securities and Exchange Commission. These uncertainties may cause
the Company's actual future results to be materially different than
those expressed in the Company's forward-looking statements. The
Company does not undertake to update its forward-looking
statements.
FORTRESS INTERNATIONAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
Fortress International Group, Inc.
(Successor)
----------------------------------
December 31, December 31,
2008 2007
---------------- ----------------
Current Assets
Cash and cash equivalents $ 12,448,157 $ 13,172,210
Contract and other receivables, net 21,288,660 18,349,140
Costs and estimated earnings in
excess of billings on uncompleted
contracts 3,742,530 1,322,254
Prepaid expenses and other current
assets 539,124 301,487
Income taxes receivable - 893,322
---------------- ----------------
Total current assets 38,018,471 34,038,413
Property and equipment, net 824,487 1,044,545
Goodwill 4,811,000 20,714,967
Intangible assets, net 13,559,234 21,089,136
Other assets 225,853 512,000
---------------- ----------------
Total assets $ 57,439,045 $ 77,399,061
================ ================
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable, current portion $ 1,688,845 $ 1,650,306
Accounts payable and accrued
expenses 24,394,990 16,121,492
Billings in excess of costs and
estimated earnings on uncompleted
contracts 6,047,765 3,880,279
---------------- ----------------
Total current liabilities 32,131,600 21,652,077
Notes payable, less current portion 311,709 348,661
Convertible notes 4,000,000 7,500,000
Other liabilities 137,198 44,646
---------------- ----------------
Total liabilities 36,580,507 29,545,384
Commitments and Contingencies - -
Stockholders' Equity
Preferred stock - $.0001 par value;
1,000,000 shares authorized; no
shares issued or outstanding - -
Common stock - $.0001 par value,
100,000,000 shares authorized;
12,797,296 and 12,150,400 issued;
12,621,716 and 11,992,325
outstanding at December 31, 2008
and December 31, 2007, respectively 1,273 1,214
Additional paid-in capital 61,262,224 55,268,012
Treasury stock, 175,580 and 158,075
shares at cost at December 31, 2008
and December 31, 2007, respectively (869,381) (814,198)
Accumulated deficit (39,535,578) (6,601,351)
---------------- ----------------
Total stockholders' equity 20,858,538 47,853,677
---------------- ----------------
Total liabilities and stockholders'
equity $ 57,439,045 $ 77,399,061
================ ================
FORTRESS INTERNATIONAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Fortress International Group, Inc. (Successor)
------------------------------------------------------
For the Three Months Ended For the Year Ended
December 31, December 31,
-------------------------- --------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Results of
Operations:
Revenue $ 37,168,297 $ 18,223,808 $102,531,778 $ 50,455,823
Cost of revenue 32,015,187 14,692,436 86,734,358 42,071,361
------------ ------------ ------------ ------------
Gross profit 5,153,110 3,531,372 15,797,420 8,384,462
Operating
expenses:
Selling,
general and
administrative 3,965,194 4,536,663 19,240,300 14,563,111
Depreciation
and
amortization 112,284 105,205 468,094 394,913
Amortization of
intangibles 657,978 534,551 2,762,045 2,109,222
Impairment loss
on goodwill
and other
intangibles 21,799,943 - 25,989,943 -
------------ ------------ ------------ ------------
Total operating
costs 26,535,399 5,176,419 48,460,382 17,067,246
Operating loss (21,382,289) (1,645,047) (32,662,962) (8,682,784)
Interest income
(expense), net (10,991) 330,130 (205,652) 806,518
------------ ------------ ------------ ------------
Loss from
operations
before income
taxes (21,393,280) (1,314,917) (32,868,614) (7,876,266)
Income tax
expense
(benefit) 28,509 (149,830) 65,611 (499,155)
------------ ------------ ------------ ------------
Net loss $(21,421,789) $ (1,165,087) $(32,934,225) $ (7,377,111)
============ ============ ============ ============
Per Common Share
(Basic and
Diluted):
Basic and diluted
net loss $ (1.70) $ (0.10) $ (2.68) $ (0.63)
Weighted average
common shares
outstanding -
basic and
diluted 12,588,819 11,904,542 12,270,546 11,698,895
FORTRESS INTERNATIONAL GROUP, INC.
ADJUSTED EBITDA RECONCILIATION
Fortress International Group, Inc. (Successor)
----------------------------------------------------------
For the Three Months Ended For the Year Ended
December 31, December 31,
---------------------------- ----------------------------
2008 2007 2008 2007
------------- ------------- ------------- -------------
(unaudited) (unaudited)
Net loss $ (21,421,789) $ (1,165,087) $ (32,934,225) $ (7,377,111)
Interest (income)
expense, net 10,991 (330,130) 205,652 (806,518)
Taxes 28,509 (149,830) 65,611 (499,155)
Depreciation
and
amortization 112,284 105,205 468,094 394,913
Amortization of
intangibles 853,317 671,245 3,344,804 2,562,664
------------- ------------- ------------- -------------
EBITDA (20,416,688) (868,597) (28,850,064) (5,725,207)
Non-cash equity
based
compensation 562,244 406,621 2,031,492 1,405,728
Impairment loss
on goodwill
and other
intangibles 21,799,943 - 25,989,943 -
------------- ------------- ------------- -------------
Adjusted EBITDA $ 1,945,499 $ (461,976) $ (828,629) $ (4,319,479)
============= ============= ============= =============
Company Contact: Timothy C. Dec Chief Financial Officer Fortress
International Group, Inc. Phone: (410) 423-7438 Investor Relations:
John McNamara Cameron Associates Phone: (212) 245-8800 Ext. 205
Email Contact
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