PITTSBURGH, July 22 /PRNewswire-FirstCall/ -- Michael Baker Corporation today announced the filing of its Form 10-Q for the first quarter of 2008, which includes the Company's recently restated results for the first quarter of 2007. The financial results contained in the filing are summarized here.
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For the quarter, Baker reported net income of $6.1 million, or a first-quarter record $0.69 per diluted share, on revenues of $174.9 million, compared to net income of $1.6 million, or $0.18 per diluted share, on revenues of $169.6 million in the first quarter of 2007.
The first-quarter 2008 revenue increase is attributable to a 20 percent period-over-period growth in the Company's Engineering segment revenue, which was partially offset by a 17 percent period-over-period decrease in Energy segment revenue. The Engineering revenue increase relates primarily to growth in most of the segment's practice areas, including growth in the work performed for an unconsolidated joint venture operating in Iraq, and the recognition of a non-recurring project settlement under a previously awarded contract that was subsequently reprocured by the client. The decrease in the Energy segment's revenue was caused primarily by a client's sale of properties and the resulting termination of a managed services contract during the third quarter of 2007, and a change in the scope of another managed services contract.
Operating income before corporate overhead allocations in the Engineering segment for the first quarter of 2008 was $13.1 million, an increase of 36 percent compared to the operating income before corporate overhead allocations for first-quarter 2007. This increase was the result of the non-recurring project settlement mentioned above and an improved project mix compared to the year-ago period. Operating income before corporate overhead allocations in the Energy business for the first three months of 2008 was $1.3 million, a significant improvement from the restated operating loss of $(0.4) million before corporate overhead allocations for the same period of 2007. This increase is attributable primarily to a decrease in self-insured general liability costs and the realization of project incentive awards, but was partially offset by an increase in workers' compensation insurance expense and professional fees related to the previously mentioned restatement of the Company's financial results.
Total backlog for the Engineering and Energy businesses at March 31, 2008, was $1.31 billion, essentially the same as the total backlog at December 31, 2007. Of these totals, $427.6 million and $425.6 million at March 31, 2008, and December 31, 2007, respectively, are considered funded backlog for the Engineering segment. Included in funded backlog at March 31, 2008, was $50 million related to the Company's FEMA Map Modernization contract, compared to $57 million at December 31, 2007.
On the balance sheet as of March 31, 2008, the Company had no long-term debt and an available cash balance of approximately $26 million.
Commenting on the results, President and Chief Executive Officer Bradley L. Mallory, said, "We are encouraged by our financial performance in the first quarter, especially since the first three months are historically our slowest period in the year. I am particularly pleased with the strength of our Engineering segment and the fact that almost all of its operations achieved revenue improvement compared to the same period last year. We are on a path to sustain this performance as we solidify our business strategies that include organic growth, acquisitions, and improving our business processes. Our markets of focus continue to provide ample project opportunities to support our growth agenda while our operating structure has been better aligned with these markets." He added that the filing of this Form 10-Q with the Securities and Exchange Commission brings the Company current with its filings for the year and into full compliance with the listing standards of the American Stock Exchange.
Michael Baker Corporation (http://www.mbakercorp.com/) provides engineering and operations and maintenance services for its clients' most complex challenges worldwide. The firm's primary business areas are aviation, defense, environmental, facilities, geospatial, homeland security, municipal & civil, pipelines & utilities, transportation, water, and oil & gas. With more than 4,000 employees in over 50 offices across the United States and internationally, Baker is focused on creating value by delivering innovative and sustainable solutions for infrastructure and the environment.
Conference Call
Michael Baker Corporation has scheduled a conference call and webcast for Thursday, July 24, at 10:00 AM Eastern Daylight Savings Time to discuss these results. Please call 800-860-2442 at least 10 minutes prior to the start of the call. To access the webcast, please visit the investor relations portion of Baker's website at http://www.mbakercorp.com/.
(The above information contains forward-looking statements concerning our future operations and performance. Forward-looking statements are subject to market, operating and economic risks and uncertainties that may cause our actual results in future periods to be materially different from any future performance suggested herein. Factors that may cause such differences include, among others: increased competition; increased costs; changes in general market conditions; changes in industry trends; changes in the regulatory environment; changes in our relationship and/or contracts with the Federal Emergency Management Agency ("FEMA"); changes in anticipated levels of government spending on infrastructure, including the Safe, Accountable, Flexible, Efficient Transportation Equity Act-A Legacy for Users ("SAFETEA-LU"); changes in loan relationships or sources of financing; changes in management; and changes in information systems. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.)
FINANCIAL SUMMARY (Unaudited) First Quarter Operating Results For the quarter ended March 31 ------------------------------- ------------------------------ (In thousands, except earnings per share) 2008 2007 ------ ------ (Restated) Revenues $174,874 $169,632 Gross profit 26,716 20,675 Income from operations 9,810 3,091 Income before income taxes 10,583 2,947 Net income $6,115 $1,550 Net income per share: Basic $0.70 $0.18 Diluted $0.69 $0.18 -------------------------------------------------------------------------- For the quarter ended March 31 ------------------------------ (In millions) 2008 2007 -------------------------------------------------------------------------- (Restated) Revenues Engineering $108.7 $90.2 Energy 66.2 79.4 -------------------------------------------------------------------------- Total revenues $174.9 $169.6 ========================================================================== -------------------------------------------------------------------------- Income/(loss) from operations before Corporate overhead Engineering $13.1 $9.6 Energy 1.3 (0.4) -------------------------------------------------------------------------- Total segment income from operations before Corp. overhead 14.4 9.2 -------------------------------------------------------------------------- Less: Corporate overhead Engineering (3.4) (4.0) Energy (1.4) (1.5) -------------------------------------------------------------------------- Total Corporate overhead (4.8) (5.5) -------------------------------------------------------------------------- Total income/(loss) from operations Engineering 9.7 5.6 Energy (0.1) (1.9) Other Corporate income/(expense) 0.2 (0.6) -------------------------------------------------------------------------- Total income from operations $9.8 $3.1 ========================================================================== Backlog As of ------- ------------------------------ (In millions) 3/31/08 12/31/07 Engineering ------- -------- Funded $427.6 $425.6 Unfunded 690.9 696.6 -------------------------------------------------------------------------- Total Engineering 1,118.5 1,122.2 Energy 188.4 191.7 -------------------------------------------------------------------------- Total $1,306.9 $1,313.9 ========================================================================== Condensed Consolidated Balance Sheets As of ------------------------------------- ---------------------------- (In thousands) 3/31/08 12/31/07 -------- --------- ASSETS Cash and cash equivalents $25,935 $22,052 Receivables, net 109,222 109,453 Unbilled revenues on contracts in progress 93,749 88,214 Prepaid expenses and other 11,683 14,718 -------------------------------------------------------------------------- Total current assets 240,589 234,437 Property, plant and equipment, net 16,203 16,776 Goodwill and other intangible assets, net 17,339 17,367 Other long-term assets 5,959 7,770 -------------------------------------------------------------------------- Total assets $280,090 $276,350 ========================================================================== LIABILITIES & SHAREHOLDERS' INVESTMENT Accounts payable $53,405 $55,940 Accrued compensation and insurance 39,297 41,974 Other accrued expenses 36,588 36,123 Billings in excess of revenues 18,012 15,771 -------------------------------------------------------------------------- Total current liabilities 147,302 149,808 Other long-term liabilities 11,572 11,485 -------------------------------------------------------------------------- Total liabilities 158,874 161,293 -------------------------------------------------------------------------- Common Stock 9,318 9,306 Additional paid-in capital 47,530 47,356 Retained earnings 69,175 63,060 Accumulated other comprehensive (loss)/income (46) 96 Less -- Treasury shares (4,761) (4,761) -------------------------------------------------------------------------- Total shareholders' investment 121,216 115,057 -------------------------------------------------------------------------- Total liabilities & shareholders' investment $280,090 $276,350 ==========================================================================
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