SOUTH BEND, Ind., March 29 /PRNewswire-FirstCall/ -- Fast growing industrial services provider MISCOR Group, Ltd. (BULLETIN BOARD: MCGL) reported strong operating income for the fiscal year ended Dec. 31, 2006, driven by a 31 percent increase in net sales. The increase was driven by gains across all its segments, including Industrial Services, Electrical Contracting and Diesel Engine Components.
MISCOR, a South Bend, Ind.-based provider of mechanical and electrical industrial services and products, reported net sales of $60.8 million for the year ended Dec. 31, 2006, as compared to $46.3 million for 2005. Operating income increased to $1.2 million as compared to a loss of $516,000 for the fiscal year ended Dec. 31, 2005. The Company narrowed its net loss for the year to $2.6 million, or $0.02 per diluted share, compared with a net loss of $7.1 million, or $0.07 per diluted share, in 2005. The loss was attributed to investments made in the Company's infrastructure, ongoing acquisition activities, including the second quarter purchase of a Saraland, Ala.-based industrial services operation, as well as interest expense to fund expansion.
"We are pleased with our results for the year as we continue our string of five straight years of better than 30 percent growth in net sales, fueled by improved results at every segment," said John Martell, president and CEO of MISCOR. "We also expanded our footprint with new locations and service areas during the year that, combined with our increasing stable of blue chip customers, bode well for 2007."
For the fourth quarter of 2006, MISCOR continued its momentum with a 27 percent increase in net sales to $17.4 million, compared with net sales of $13.7 million in the fourth quarter of 2005. Growth in service revenues across MISCOR's three segments highlighted the quarter, increasing more than 35 percent to $13.5 million as compared to $9.9 million in the year-ago period, driven by increased geographic service areas, the addition of operations from the Saraland, Ala. acquisition and enhanced customer loyalty.
MISCOR posted a strong increase in operating income to $29,000 for the fourth quarter of 2006, as compared with an operating loss of $469,000 in the year-ago period. MISCOR also reported net income of $452,000, or $0.00 per diluted share, for the fourth quarter of 2006, as compared with a net loss of $1.4 million, or $0.01 per diluted share, in the fourth quarter of 2005. Net income in the current quarter included a gain resulting from the marking to market of warrants in accordance with accounting guidance for derivative financial instruments.
"We ended the fourth quarter on a high note as we experienced strong top- line growth for the third consecutive quarter," continued Martell. "This momentum creates a strong platform that should enable us to continue growing our margins and surveying the horizon for further expansion opportunities."
Segment Results
The Company has three operating segments: Industrial Services, comprised of the Motor, Magnet, and Engineering Services Groups; Electrical Contracting, which provides customers with a variety of maintenance and repair services for industrial, commercial, and institutional operations; and Diesel Engine Components, which manufactures, remanufactures and repairs power assemblies and other components related to large diesel engines.
On the year, total revenues for the three segments increased $14.5 million. Industrial services accounted for $7.5 million of the increase, driven by continuing growth of its service revenues, which grew more than 34 percent in 2006. Electrical Contracting contributed $3.5 million to the sales gain, driven by increasing market penetration and geographic expansion. The Diesel Engine Components segment added $3.3 million to the year-end growth, driven by growing name brand recognition and the addition of new customers.
MISCOR noted that service revenue increased across all segments in fiscal 2006, closing the year with an increase of 34 percent to $42.6 million, as compared with $31.7 million in 2005. Growth in total service revenues is attributed to an increasing demand for repair and remanufactured services generated by the aging U.S. industrial base, combined with MISCOR's increasing geographic reach and gains in market share.
Segments results for the 2006 fourth quarter were marked by total revenues increasing 27 percent to $17.4 million, compared to $13.7 million in the prior year's fourth quarter. Industrial services accounted for $2.5 million of the increase, primarily driven by strong growth in service revenues. In addition, Electrical Contracting grew $1.1 million in the quarter.
"Our strong results, in both the fourth quarter and the year, showcase not only the ability of our management team to execute our business plans, but their foresight in positioning MISCOR as an emerging leader in repair and remanufacturing services," said Rich Mullin, chief financial officer of MISCOR. "Combined with our highly experienced frontline talent and our targeted acquisition activity to add complimentary products, services and locations to our core business, we are well positioned moving into 2007 to evolve into a national service provider of choice."
Over the past several years, MISCOR's success as a rapidly growing private company has been recognized by Inc. magazine, which ranked the Company #128 among the 500 fastest-growing private companies in the country for 2005 and #58 for 2004. In addition, MISCOR was recently ranked #3 on the Inner City 100's list of fastest-growing inner city companies in America with a five-year growth rate of 3,413 percent.
"Amidst the details of becoming a publicly traded company in 2006, we were able to maintain our pace of growth and build on the core elements that have contributed to our success," concluded Martell. "These core elements, combined with our financial performance in the fourth quarter and the year, puts us another step closer to reaching our goal of bottom-line profitability."
About MISCOR
South Bend, Ind.-based MISCOR Group, Ltd. (BULLETIN BOARD: MCGL) provides electrical and mechanical solutions to industrial, commercial and institutional customers through three segments: Industrial Services, which provides maintenance and repair services for industrial motors, generators and lifting magnets, as well as engineering and repair services for electrical power distribution systems; Diesel Engine Components, which provides diesel engine component manufacturing, remanufacturing and repair services; and Electrical Contracting Services, which provides a wide range of electrical contracting services to industrial, commercial and institutional customers. MISCOR also provides on-site maintenance services along with custom and standardized industrial maintenance training programs. Formerly known as Magnetech Integrated Services Corp., MISCOR was ranked on the Inc. 500 in each of the last two years and has grown to more than 450 employees in 12 locations nationwide.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties that ultimately may not prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. For further discussion of risks and uncertainties, individuals should refer to the Company's SEC filings. MISCOR Group, Ltd. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.
