Attached files
| file | filename |
|---|---|
| 8-K - TSS, Inc. | v166029_8k.htm |
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Company
Contact:
|
Investor
Relations:
|
|
Timothy
C. Dec
|
Kristen
McNally/Brandi Floberg
|
|
Chief
Financial Officer
|
The
Piacente Group, Inc.
|
|
Fortress
International Group, Inc.
|
Phone:
(212) 481-2050
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|
Phone:
(410) 423-7438
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figi@tpg-ir.com
|
FOR
IMMEDIATE RELEASE
FORTRESS
INTERNATIONAL GROUP, INC. REPORTS
THIRD
QUARTER 2009 FIANANCIAL RESULTS
Company
Achieves Adjusted EBITDA of $716,000 on Revenue of $16.0 Million
COLUMBIA, MD, November 13, 2009 --
Fortress International Group, Inc. (NASDAQ: FIGI) ("Fortress"), a
provider of consulting and engineering, construction management and 24/7/365
site services for mission-critical facilities, today announced its financial
results for the third quarter ended September 30, 2009.
For the
three-month period ended September 30, 2009, the Company reported revenue of
$16.0 million, compared with revenue of $25.8 million for the third quarter of
2008. The decrease in revenue was primarily attributable to continued delays in
the commencement of projects as a result of continued weakness in the broader
economy.
Gross
profit for the third quarter of 2009 was $3.4 million, or 21.3%, compared with
gross profit of $5.1 million, or 19.8%, for the third quarter of
2008.
Net
income for the third quarter of 2009 was $20,000, or $0.00 per share, compared
with a net loss of ($3.2) million, or ($0.26) per share, for the third quarter
of 2008. Adjusted EBITDA for the third quarter ended September 30, 2009 was
approximately $716,000, compared with adjusted EBITDA of approximately $885,000
for the third quarter of 2008. The Company defines adjusted EBITDA as earnings
before non-cash equity-based compensation, interest, taxes, depreciation and
amortization, impairment loss on goodwill and other intangibles, and provision
for bad debt expense. Adjusted EBITDA is a non-GAAP measurement presented to
provide further information about the Company's operating trends.
For the
nine-month period ended September 30, 2009, the Company reported revenue of
$61.0 million, compared with revenue of $65.4 million for the nine-month period
ended September 30, 2008.
Gross
profit for the nine months ended September 30, 2009 was $8.9 million, or 14.6%,
compared with gross profit of $10.6 million, or 16.2%, for the nine months ended
September 30, 2008.
1
Net loss
for the nine months ended September 30, 2009 was ($17.8) million, or ($1.40) per
share, compared with a net loss of ($11.5) million, or ($0.95) per share, for
the nine months ended September 30, 2008. Adjusted EBITDA loss (as defined
above) for the nine months ended September 30, 2009 was approximately
($355,000), compared with adjusted EBITDA loss of ($2.7) million for the nine
months ended September 30. 2008.
As of
September 30, 2009, Fortress’ backlog totaled $39.9 million, compared with a
backlog of $42.7 million as of June 30, 2009.
Commenting
on the results, Chief Executive Officer Thomas P. Rosato stated, “We made
notable progress in the third quarter as evidenced by our return to adjusted
EBITDA profitability. Our gains were largely attributable to our continued
careful expense control, which has enabled us to reduce SG&A by over 35%
compared to the third quarter of 2008. We have seen a number of
positive signs across the industry, as capital constraints have begun to loosen
and our customers are becoming more agile in their ability to move forward with
previously delayed projects. Including the $39.4 million in contract awards that
we announced in October, we have closed a total of $49.1 million of new business
since the end of the second quarter.
“While
the overall economic situation remains uncertain, we are encouraged by increased
potential and pipeline activity from both existing and potential customers and
we expect to see increased project spending over the next few quarters. We
believe that Fortress’ service offering is among the best in the industry and
are well positioned to capitalize on new business opportunities as the markets
we serve continue to recover,” Mr. Rosato concluded.
Chief
Financial Officer Timothy C. Dec added, "The sequential increase in gross margin
in the third quarter was due primarily to the completion of a large-scale
construction management project, as well as increased profitability in our
facilities management division. The Company has been dramatically impacted by
the challenging economic environment over the past 12 months. During that time
we took strategic steps to significantly reduce our SG&A, which has enabled
us to achieve positive adjusted EBITDA for three out of the last four quarters,
as well as positive net income in the third quarter of 2009 for the first time
in our company history. We will continue to maintain tight expense controls
in-line with our anticipated revenue streams.”
Quarterly Conference Call
Details
The
Company will conduct its regularly scheduled financial announcement conference
call on Friday, November 13, 2009, at 9:00 a.m. EDT. Investors may listen to the
conference call via telephone at: 877-941-1427 (U.S./Canada) or 480-629-9664
(international) or via live audio web cast on the investor relations section of
the Company's website at www.thefigi.com.
An audio
replay of the conference call will also be available approximately two hours
after the conclusion of the call and will be available until Friday, November
27, 2009. The audio replay can be accessed by dialing 800-406-7325 (U.S./Canada)
or 303-590-3030 (international) and entering conference call ID 4180472, or via
an archived webcast available on the investor relations section of the Company's
website at www.thefigi.com.
2
About
Non-GAAP Financial Measures
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 (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 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. is headquartered in Maryland, with offices throughout
the U.S. For more information, visit: www.FortressInternationalGroup.com
or call 888-321-4877.
Fortress
International Group, Inc. -- setting a new standard for the optimized critical
facility.
3
Forward
Looking Statements
This
press release 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 affect the Company's future results include: the Company's reliance on
a significant portion of its revenues from a limited number of customers; risks
relating to our ability to continue as a going concern; the uncertainty whether
the Company can raise substantial additional funds to continue its operations;
risks associated with our effort to meet our working capital requirements and
scheduled maturities of indebtedness absent restructuring; 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; the uncertainty
whether potential contracts and our backlog would materialize; risks relating to
our ability to implement a reduction in our expenses; risks relating our ability
to continue to implement our business plan; risks relating to our liquidity;
risks relating to our ability to meet all of the terms and conditions of our
debt obligations; uncertainty related to current economic conditions and the
related impact on demand for our services; 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
| (Unaudited) | ||||||||
|
September
30,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
Current
Assets
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||||||||
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Cash
and cash equivalents
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$ | 2,364,992 | $ | 12,448,157 | ||||
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Contract
and other receivables, net
|
11,479,504 | 21,288,660 | ||||||
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Costs
and estimated earnings in excess of billings
|
||||||||
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on
uncompleted contracts
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2,865,426 | 3,742,530 | ||||||
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Prepaid
expenses and other current assets
|
531,410 | 539,124 | ||||||
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Total
current assets
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17,241,332 | 38,018,471 | ||||||
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Property
and equipment, net
|
627,191 | 824,487 | ||||||
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Goodwill
|
4,474,563 | 4,811,000 | ||||||
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Other
intangible assets, net
|
117,930 | 13,559,234 | ||||||
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Other
assets
|
280,036 | 225,853 | ||||||
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Total
assets
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$ | 22,741,052 | $ | 57,439,045 | ||||
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Liabilities
and Stockholders’ Equity
|
||||||||
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Current
Liabilities
|
||||||||
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Notes
payable, current portion
|
$ | 482,572 | $ | 1,688,845 | ||||
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Convertible
note, current portion
|
2,000,000 | - | ||||||
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Accounts
payable and accrued expenses
|
10,709,344 | 24,394,990 | ||||||
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Billings
in excess of costs and estimated earnings
|
||||||||
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on
uncompleted contracts
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2,825,020 | 6,047,765 | ||||||
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Total
current liabilities
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16,016,936 | 32,131,600 | ||||||
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Notes
payable, less current portion
|
228,187 | 311,709 | ||||||
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Convertible
notes, less current portion
|
2,000,000 | 4,000,000 | ||||||
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Other
liabilities
|
57,536 | 137,198 | ||||||
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Total
liabilities
|
18,302,659 | 36,580,507 | ||||||
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Commitments
and Contingencies
|
- | - | ||||||
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Stockholders’
Equity
|
||||||||
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Preferred
stock- $.0001 par value; 1,000,000 shares authorized; no
shares
|
||||||||
|
issued
or outstanding
|
- | - | ||||||
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Common
stock- $.0001 par value, 100,000,000 shares authorized;
12,870,626
|
||||||||
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and
12,797,296 issued; 12,676,767 and 12,621,716 outstanding
at
|
||||||||
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September
30,2009 and December 31, 2008, respectively
|
1,290 | 1,279 | ||||||
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Additional
paid-in capital
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62,655,305 | 61,262,218 | ||||||
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Treasury stock- 226,193 and 175,580 shares at cost at September 30, 2009
and December 31, 2008
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(918,099 | ) | (869,381 | ) | ||||
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Accumulated
deficit
|
(57,300,103 | ) | (39,535,578 | ) | ||||
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Total
stockholders' equity
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4,438,393 | 20,858,538 | ||||||
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Total
liabilities and stockholders’ equity
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$ | 22,741,052 | $ | 57,439,045 | ||||
4
FORTRESS
INTERNATIONAL GROUP, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
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For
the Three Months Ended
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For
the Nine Months Ended
|
|||||||||||||||
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September
30, 2009
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September
30, 2008
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September
30, 2009
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September
30, 2008
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|||||||||||||
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Results
of Operations:
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||||||||||||||||
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Revenue
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$ | 16,005,741 | $ | 25,781,523 | $ | 61,016,490 | $ | 65,363,481 | ||||||||
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Cost
of revenue
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12,595,265 | 20,660,103 | 52,157,345 | 54,719,170 | ||||||||||||
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Gross
profit
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3,410,476 | 5,121,420 | 8,859,145 | 10,644,311 | ||||||||||||
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Operating
expenses:
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||||||||||||||||
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Selling,
general and administrative
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3,140,715 | 4,838,291 | 11,632,284 | 15,275,116 | ||||||||||||
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Depreciation
and amortization
|
101,474 | 125,716 | 309,934 | 355,810 | ||||||||||||
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Amortization
of intangibles
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93,211 | 702,569 | 1,476,171 | 2,104,067 | ||||||||||||
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Impairment
loss on goodwill and other intangibles
|
- | 2,973,000 | 13,062,133 | 4,190,000 | ||||||||||||
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Total
operating costs
|
3,335,400 | 8,639,576 | 26,480,522 | 21,924,993 | ||||||||||||
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Operating
loss
|
75,076 | (3,518,156 | ) | (17,621,377 | ) | (11,280,682 | ) | |||||||||
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Interest
income (expense), net
|
(55,321 | ) | (49,653 | ) | (143,140 | ) | (194,661 | ) | ||||||||
|
Loss
from operations before income taxes
|
19,755 | (3,567,809 | ) | (17,764,517 | ) | (11,475,343 | ) | |||||||||
|
Income
tax expense (benefit)
|
- | (349,898 | ) | - | 37,102 | |||||||||||
|
Net
income (loss)
|
$ | 19,755 | $ | (3,217,911 | ) | $ | (17,764,517 | ) | $ | (11,512,445 | ) | |||||
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Per
Common Share (Basic and Diluted):
|
||||||||||||||||
|
Basic
and diluted net loss
|
$ | 0.00 | $ | (0.26 | ) | $ | (1.40 | ) | $ | (0.95 | ) | |||||
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Weighted
average common shares outstanding-basic and diluted
|
12,675,630 | 12,326,397 | 12,665,242 | 12,164,454 | ||||||||||||
FORTRESS
INTERNATIONAL GROUP, INC.
ADJUSTED
EBITDA RECONCILIATION
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
For
the Three Months Ended September 30,
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For
the Nine Months Ended September
|
|||||||||||||||
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2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Net
income (loss)
|
$ | 19,755 | $ | (3,217,911 | ) | $ | (17,764,517 | ) | $ | (11,512,445 | ) | |||||
|
Interest
(income) expense, net
|
55,321 | 49,653 | 143,140 | 194,661 | ||||||||||||
|
Income
tax expense (benefit)
|
- | (349,898 | ) | - | 37,102 | |||||||||||
|
Depreciation
and amortization
|
101,474 | 125,716 | 309,934 | 355,810 | ||||||||||||
|
Amortization
of intangibles
|
93,211 | 818,075 | 1,476,171 | 2,491,477 | ||||||||||||
|
EBITDA
|
269,761 | (2,574,365 | ) | (15,835,272 | ) | (8,433,395 | ) | |||||||||
|
Stock
and warrant-based compensation
|
446,358 | 456,835 | 1,393,098 | 1,469,252 | ||||||||||||
|
Impairment
loss on goodwill and other intangibles
|
- | 2,973,000 | 13,062,133 | 4,190,000 | ||||||||||||
|
Provision
for bad debts
|
- | 29,933 | 1,025,083 | 119,728 | ||||||||||||
|
Adjusted
EBITDA
|
$ | 716,119 | $ | 885,403 | $ | (354,958 | ) | $ | (2,654,415 | ) | ||||||
#
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5