PCR Perini Cp

Perini Corporation (NYSE:PCR), a leading building, civil construction and construction management company, today reported results for the third quarter ended September 30, 2005. Third Quarter Results Net income was $6.0 million for the third quarter of 2005, as compared to third quarter net income of $6.4 million in 2004. Diluted earnings per common share were $0.22 for the third quarter of 2005, as compared to $0.25 for the third quarter of 2004. Revenues from construction operations were $380.3 million for the third quarter of 2005, compared to revenues of $467.7 million reported for the third quarter of 2004. The third quarter of 2005 operating results reflect a decrease in revenues, most notably in the building segment, due primarily to the shift in timing of new work awards in the hospitality and gaming markets into later in 2005 and 2006. This decrease was offset by higher gross margins experienced by all of the Company's business segments. Also, general and administrative expenses increased for the third quarter of 2005 from the comparable period in 2004 due to the inclusion of Cherry Hill Construction, Inc. acquired in January 2005 and an increase in compensation expense relating to the amortization of certain restricted stock awards granted in the second half of 2004. Robert Band, President and Chief Operating Officer, stated that, "We are pleased to report a profitable performance for the third quarter of 2005. We have continued to convert the pending awards and new work opportunities to contracts achieving a record backlog of $3.33 billion, which represents a 189% increase in backlog of work on hand as compared to December 31, 2004. In addition to the $1.94 billion of new awards added during the third quarter of 2005, the Company recently announced the award of the $463 million expansion of the Foxwoods Resort Casino. We continue to work closely with MGM Mirage to finalize the construction plans and contracts for Project CityCenter in Las Vegas, which would add in excess of $3.0 billion if signed into backlog. Given the strong internal growth along with the recent acquisitions of Cherry Hill Construction and Rudolph and Sletten, we are anticipating a strong fourth quarter of 2005." Nine Month Results For the first nine months of 2005, net income was $18.0 million, as compared to $29.8 million for the first nine months of 2004. Diluted earnings per common share were $0.66 for the first nine months of 2005, as compared to $1.16 for the first nine months of 2004. The results for the first nine months of 2004 reflect a lower than normal tax rate due to the realization of a portion of the federal tax benefit not recognized in prior years. Assuming an effective income tax rate of 39%, pro forma net income for the nine months ended September 30, 2004 would have been $21.2 million. Similarly, pro forma diluted earnings per common share for the nine months ended September 30, 2004 would have been $0.81. Please refer to Table 1 at the end of this press release for a reconciliation of reported net income in accordance with generally accepted accounting principles to pro forma net income. Revenues from construction operations totaled $1,130.3 million for the first nine months of 2005, compared to revenues of $1,443.9 million reported for the first nine months of 2004. Backlog at $3.33 Billion The backlog of uncompleted construction work at September 30, 2005 was $3.33 billion, a 189% increase compared to $1.15 billion at December 31, 2004. The September 30, 2005 backlog includes new contract awards added during the third quarter of 2005 totaling $1.94 billion and including approximately $1.54 billion of hotel and casino work in Las Vegas, $185 million of additional work in Iraq, $65 million of bridge rehabilitation work in New Jersey, and $66 million of other civil projects in the mid-Atlantic region. The $3.3 billion in backlog at September 30, 2005 excludes the recently announced $463 million contract for the expansion of the Foxwoods Resort Casino in southeastern Connecticut, the previously announced award of Project CityCenter in Las Vegas with an estimated value in excess of $3.0 billion for which contracts have not been signed and the estimated $945 million in the backlog of Rudolph and Sletten. Adjusted for these items and assuming the contracts for Project CityCenter are signed, the Company's backlog as of September 30, 2005 would have been approximately $7.7 billion. Financial Condition Remains Strong in 2005 The Company's financial condition remained strong at September 30, 2005. Working capital increased from $178.0 million at December 31, 2004 to $183.0 million at September 30, 2005. The Company's solid base of shareholders' equity totaling $195.9 million at September 30, 2005 and the financial strength of the Company's balance sheet and availability under its amended credit facility adequately supports Perini's growing backlog. Outlook As a result of the strong contract awards received in the third quarter of 2005 the Company affirms previously released 2005 revenue guidance in the range of $1.5 to $1.6 billion and narrows the diluted earnings per share guidance to $0.95 to $1.05. The diluted earnings per share guidance does not include the expected favorable impact of approximately $0.09 per share from the settlement with certain holders of our $21.25 Preferred Stock. Looking ahead to 2006, as a result of the new and pending awards and the acquisition of Rudolph and Sletten, the Company expects a strong contribution from its building segment. In addition, the Company anticipates continued improvement from its civil segment and another year of profitable operations from its management services segment. The Company's initial guidance for 2006 revenues is in the range of $2.6 to $2.8 billion with diluted earnings per share ranging from $1.30 to $1.45. About Perini Corporation Perini Corporation is a leading construction services company offering diversified general contracting, construction management and design-build services to private clients and public agencies throughout the world. We have provided construction services since 1894 and have established a strong reputation within our markets by executing large complex projects on time and within budget while adhering to strict quality control measures. We offer general contracting, preconstruction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project. We also offer self-performed construction services including sitework, concrete forming and placement and steel erection. We are known for our hospitality and gaming industry projects, sports and entertainment, educational, and healthcare facilities as well as large and complex civil construction projects and construction management services to U.S. military and government agencies. Non-GAAP Measures To supplement our unaudited consolidated financial statements presented on a generally accepted accounting principles (GAAP) basis, we sometimes use non-GAAP measures of net income, earnings per share and other measures that we believe are appropriate to enhance an overall understanding of our historical financial performance and future prospects. The non-GAAP results, which are adjusted to exclude certain costs, expenses, gains and losses from the comparable GAAP measures, are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. These non-GAAP results are among the indicators management uses as a basis for evaluating our financial performance as well as for forecasting future periods. For these reasons, management believes these non-GAAP measures can be useful to investors, potential investors and others. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or earnings per share prepared in accordance with GAAP. The statements contained in this Release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including without limitation, statements regarding the Company's expectations, hopes, beliefs, intentions or strategies regarding the future. These forward-looking statements are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the Company's ability to successfully and timely complete construction projects, the ability of the Company to convert MGM Project CityCenter and other pending awards to backlog, the Company's ability to successfully complete the integration of Rudolph and Sletten, the risk that the Company will incur unanticipated costs related to the acquired operations or not realize expected revenues, synergies and cost savings, the potential delay, suspension, termination, or reduction in scope of a construction project; the continuing validity of the underlying assumptions and estimates of total forecasted project revenues, costs and profits and project schedules; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings; the availability of borrowed funds on terms acceptable to the Company; the ability to retain certain members of management; the ability to obtain surety bonds to secure its performance under certain construction contracts; possible labor disputes or work stoppages within the construction industry; changes in federal and state appropriations for infrastructure projects; possible changes or developments in worldwide or domestic political, social, economic, business, industry, market and regulatory conditions or circumstances; and actions taken or not taken by third parties, including the Company's customers, suppliers, business partners, and competitors and legislative, regulatory, judicial and other governmental authorities and officials. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. -0- *T Perini Corporation (NYSE) Summary of Consolidated Earnings (Unaudited) (In Thousands of Dollars) For the Three Months For the Nine Months Ended Sept. 30, Ended Sept. 30, ------------------- ----------------------- 2005 2004 2005 2004 --------- --------- ----------- ----------- Construction Revenues: Building $246,976 $346,602 $719,415 $1,008,112 Civil 77,860 46,665 191,956 110,470 Management services 55,478 74,476 218,880 325,273 --------- --------- ----------- ----------- TOTAL CONSTRUCTION REVENUES $380,314 $467,743 $1,130,251 $1,443,855 ========= ========= =========== =========== Gross profit $24,872 $23,633 $72,211 $70,892 General and administrative expenses 14,710 12,912 40,982 31,720 --------- --------- ----------- ----------- Income from construction operations 10,162 10,721 31,229 39,172 Other income (expense), net 29 (688) (638) (3,939) Interest expense (418) (198) (1,091) (506) --------- --------- ----------- ----------- Income before income taxes 9,773 9,835 29,500 34,727 Provision for income taxes (a) (3,821) (3,405) (11,538) (4,900) --------- --------- ----------- ----------- NET INCOME $5,952 $6,430 $17,962 $29,827 Less: Dividends accrued on Preferred Stock (297) (297) (891) (891) --------- --------- ----------- ----------- Total available for common stockholders $5,655 $6,133 $17,071 $28,936 ========= ========= =========== =========== BASIC EARNINGS PER COMMON SHARE $0.22 $0.26 $0.67 $1.24 ========= ========= =========== =========== DILUTED EARNINGS PER COMMON SHARE $0.22 $0.25 $0.66 $1.16 ========= ========= =========== =========== Weighted average common shares outstanding: Basic 25,541 23,906 25,392 23,376 Effect of dilutive stock options, warrants and restricted stock units outstanding 495 1,006 623 1,550 --------- --------- ----------- ----------- Diluted 26,036 24,912 26,015 24,926 --------- --------- ----------- ----------- (a) The lower-than-normal tax rate reflected in the provision for income taxes for the nine months ended September 30, 2004 is due to the realization of a portion of the federal tax benefit not recognized in prior years due to certain accounting limitations. Selected Balance Sheet Data (Unaudited) (In Thousands of Dollars) September 30, December 31, 2005 2004 ------------- ------------ Total assets $618,013 $654,265 Working capital $183,021 $178,029 Long-term debt, less current maturities $17,429 $8,608 Stockholders' equity $195,936 $174,034 Perini Corporation (NYSE) Table 1 Reconciliation of Reported Net Income to Pro Forma Net Income (A) (Unaudited) (In Thousands of Dollars) Nine Months Ended Sept. 30, 2004 -------------- Reported net income $29,827 Plus: Provision for income taxes 4,900 -------------- Income before income taxes 34,727 Provision for income taxes assuming a 39% effective rate 13,544 -------------- Pro forma net income $21,183 Less: Dividends accrued on Preferred Stock (891) -------------- Pro forma total available for common stockholders $20,292 ============== Pro forma basic earnings per common share $0.87 ============== Pro forma diluted earnings per common share $0.81 ============== Weighted average common shares outstanding: Basic 23,376 Effect of dilutive stock options, warrants and restricted stock units outstanding 1,550 -------------- Diluted 24,926 (A) The calculation of pro forma net income and pro forma earnings per common share assumes an effective tax rate of 39% which more closely approximates the Company's effective tax rate on a prospective basis. *T