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8-K - 8-K - MICHAEL BAKER CORPd436289d8k.htm
EX-99.2 - EX-99.2 - MICHAEL BAKER CORPd436289dex992.htm
EX-10.1 - EX-10.1 - MICHAEL BAKER CORPd436289dex101.htm

Exhibit 99.1

 

LOGO

N E W S R E L E A S E

 

 

      Contact:    David Higie
      Phone:    (412) 269-6449
      Release:    Immediate (Nov. 8, 2012)

BAKER ANNOUNCES FINANCIAL RESULTS FOR THIRD QUARTER AND FIRST NINE MONTHS OF 2012

Company Adopts Comprehensive Plan to Improve Performance and Deliver Value to

Shareholders, Including a $0.14 /Share Quarterly Dividend

PITTSBURGH — Michael Baker Corporation (NYSE MKT:BKR) today reported its financial results for the third quarter and first nine months of 2012. The Company also announced that its Board of Directors had adopted a comprehensive plan to improve performance and deliver value to shareholders, including a $0.14 per share quarterly dividend payable on December 19, 2012, to shareholders of record on November 28, 2012.

Results of Operations

For the quarter, Baker reported net income from continuing operations of $0.7 million, or $0.07 per diluted share, on total contract revenues of $145.2 million. This compares to net income from continuing operations of $7.1 million, or $0.76 per diluted share, on total contract revenues of $131.1 million in the third quarter of 2011.

The $14.1 million period-over-period increase in revenues was driven primarily by the addition of $23.1 million in revenues from RBF, which Baker acquired on October 1, 2011, partially offset by a decrease in work performed for the Department of Defense. The decrease in net income is attributable primarily to lower utilization, the impact of unfavorable project mix, and an increase in acquisition-related amortization expenses. This was partially offset by the addition of RBF’s gross profit and the recognition of certain non-recurring overhead adjustments related to the Company’s FEMA contracts for several prior contract years.

Total backlog for continuing operations at September 30, 2012, increased to $1.65 billion, as compared to $1.59 billion at December 31, 2011. Of these totals, $635 million and $685 million, respectively, are considered funded backlog.

For the first nine months of 2012, the Company reported income from continuing operations of $4.3 million, or $0.45 per diluted share, on total contract revenues of $452.2 million, compared with income from continuing operations of $12.8 million, or $1.38 per diluted share, on total contract revenues of $382.2 million in the first nine months of 2011.

The full-year forecasted effective income tax rate for continuing operations was 44.0 percent and 37.5 percent at September 30, 2012 and 2011, respectively.

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ADD ONE—BAKER FINANCIAL RESULTS FOR THIRD QUARTER 2012

“As we have said previously, general market conditions for many U.S. engineering firms remain challenging and we continue to see delays in major projects,” said Bradley L. Mallory, president and chief executive officer. “While we remain cautiously optimistic that the business environment will improve going forward, we are not content to wait for that improvement. Instead, we have adopted a comprehensive plan to improve our performance and deliver value to our shareholders.”

Performance Improvement Plan

During the third quarter, Baker completed an organizational realignment designed to increase work sharing, enhance cross selling and improve utilization. The Company also adopted a performance improvement plan designed to reduce its cost structure by approximately $18.0 to $20.0 million in 2013, with estimated one-time expense costs to achieve these savings of $1.0 million, substantially all of which will be incurred in the fourth quarter of 2012. Progress against this Performance Improvement Plan will be monitored by a special committee of the Board of Directors.

“With the completion of our acquisitions of LPA in 2010 and RBF in 2011, we successfully expanded our geographic footprint in the U.S., and we intend to focus on maximizing the potential cost and revenue synergies that we believe those firms present,” added Mallory. “While we may consider other potentially accretive add-on acquisitions, we expect to focus squarely in the near and intermediate term on furthering integrating LPA and RBF, as well as on the improvement of our overall results of current operations.”

Delivering Value to Shareholders

At September 30, 2012, Baker had a cash balance of $67.1 million and no debt, demonstrating that it continues to generate positive cash flow from operations despite difficult business conditions. In consideration of the Company’s financial resources and its focus on improving organic results rather than pursuing significant acquisitions, the Board of Directors has adopted a policy to pay regular quarterly dividends. Accordingly, the Board declared a cash dividend of $0.14 per share, payable on December 19, 2012, to shareholders of record on November 28, 2012.

Additionally, the Board authorized the repurchase of up to $10.0 million of the Company’s common shares. Shares may be repurchased from time to time for cash in open-market or privately-negotiated transactions in accordance with applicable securities laws. The Company will determine the timing and amount of any repurchase based on its evaluation of market conditions, share price and other factors. The share repurchase program has no pre-established closing date and may be initiated, suspended or discontinued at any time.

“The Board believes in Baker’s long-term prospects and is committed to seeking to deliver value to shareholders,” said Richard L. Shaw, chairman. “The Board will actively monitor the progress of the Performance Improvement Plan and take whatever actions we can to assure that its objectives are met.”

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ADD TWO—BAKER FINANCIAL RESULTS FOR THIRD QUARTER 2012

About Baker

Michael Baker Corporation (www.mbakercorp.com) provides engineering, design, planning and construction services for its clients’ most complex challenges worldwide. The firm’s primary business areas are architecture, aviation, defense, environmental, geospatial, homeland security, municipal & civil, oil & gas, rail & transit, telecommunications & utilities, transportation, urban development and water. With more than 3,000 employees in over 100 offices across the United States, 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 Friday, November 9, at 9:00 a.m. EST, to discuss the third quarter and first nine months’ results. Please call 877-769-6805 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 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: the events described in the “Risk Factors” section of our 2011 Form 10-K; 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; changes in loan relationships or sources of financing; changes in management; changes in information systems; and divestitures and acquisitions. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.)

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ADD THREE — BAKER FINANCIAL RESULTS FOR THIRD QUARTER 2012

FINANCIAL SUMMARY

(Unaudited)

 

Operating Results

   For the three months
ended September 30,
     For the nine months
ended September 30,
 
(In thousands, except earnings per share)    2012      2011      2012      2011  

Revenues

   $ 145,237       $ 131,139       $ 452,193       $ 382,233   

Gross profit

     22,774         27,117         72,099         75,642   

Operating Income

     1,389         9,368         6,026         18,660   

Income before income taxes and noncontrolling interests

   $ 1,617       $ 9,673       $ 7,920       $ 19,218   

Net income from continuing operations before noncontrolling interests

   $ 838       $ 7,295       $ 4,888       $ 13,631   

Income from discontinued operations, net of tax

     322         116         822         101   

Less: Income attributable to noncontrolling interests

     179         178         585         814   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Michael Baker Corporation

   $ 981       $ 7,233       $ 5,125       $ 12,918   

Earnings per share:

           

Basic-continuing operations

   $ 0.07       $ 0.76       $ 0.46       $ 1.38   

Diluted-continuing operations

     0.07         0.76         0.45         1.38   

Basic-net income

     0.11         0.77         0.55         1.39   

Diluted-net income

   $ 0.10       $ 0.77       $ 0.53       $ 1.39   
  

 

 

    

 

 

    

 

 

    

 

 

 

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ADD FOUR — BAKER FINANCIAL RESULTS FOR THIRD QUARTER 2012

 

Segment results

        
(In millions)    For the three months
ended September 30,
    For the nine months
ended September 30,
 
     2012     2011     2012     2011  

Revenues

        

Transportation

   $ 78.3      $ 76.2      $ 242.7      $ 219.4   

Federal

     66.9        54.9        209.5        162.8   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

   $ 145.2      $ 131.1      $ 452.2      $ 382.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

        

Transportation

   $ 13.5      $ 14.0      $ 41.4      $ 38.4   

Federal

     9.8        13.5        32.1        38.0   

Corporate

     (0.5     (0.4     (1.4     (0.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Total gross profit

     22.8        27.1        72.1        75.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Less: SG&A

        

Transportation

     (11.9     (11.1     (36.7     (35.1

Federal

     (9.5     (6.6     (29.4     (21.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total SG&A

     (21.4     (17.7     (66.1     (57.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income/(loss)

        

Transportation

     1.6        2.9        4.7        3.3   

Federal

     0.3        6.9        2.7        16.1   

Corporate

     (0.5     (0.4     (1.4     (0.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

   $             1.4      $             9.4      $ 6.0      $ 18.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Backlog

               As of  
(In millions)                September 30,
2012
    December 31,
2011
 

Funded

       $ 635.3      $ 684.6   

Unfunded

         1,010.2        908.6   
      

 

 

   

 

 

 

Total

       $ 1,645.5      $ 1,593.2   
      

 

 

   

 

 

 

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ADD FIVE — BAKER FINANCIAL RESULTS FOR THIRD QUARTER 2012

 

Condensed Balance Sheet

   As of  
(In thousands)    September 30,
2012
    December 31,
2011
 

ASSETS

    

Cash and cash equivalents

   $ 67,055      $ 36,050   

Available for sale securities

     —          12,323   

Receivables, net

     104,177        104,091   

Unbilled revenues on contracts in progress

     73,087        77,713   

Prepaid expenses and other

     15,796        16,100   
  

 

 

   

 

 

 

Total current assets

     260,115        246,277   
  

 

 

   

 

 

 

Property, plant and equipment, net

     17,346        20,903   

Goodwill and other intangible assets, net

     96,772        104,505   

Other long-term assets

     8,132        8,189   
  

 

 

   

 

 

 

Total assets

   $ 382,365      $ 379,874   
  

 

 

   

 

 

 

LIABILITIES & SHAREHOLDERS’ INVESTMENT

    

Accounts payable

   $ 39,517      $ 44,434   

Accrued compensation and insurance

     38,400        36,366   

Billings in excess of revenues on contracts in progress

     24,588        24,064   

Other accrued expenses

     24,741        27,677   
  

 

 

   

 

 

 

Total current liabilities

     127,246        132,541   
  

 

 

   

 

 

 

Other long-term liabilities

     27,043        26,704   
  

 

 

   

 

 

 

Total liabilities

     154,289        159,245   
  

 

 

   

 

 

 

Common Stock

     10,159        10,067   

Additional paid-in capital

     68,600        66,218   

Retained earnings

     153,730        148,605   

Accumulated other comprehensive loss

     —          (90

Less - Treasury shares

     (5,160     (4,888
  

 

 

   

 

 

 

Total Michael Baker Corporation shareholders’ investment

     227,329        219,912   

Noncontrolling interests

     747        717   
  

 

 

   

 

 

 

Total shareholders’ investment

     228,076        220,629   
  

 

 

   

 

 

 

Total liabilities & shareholders’ investment

   $ 382,365      $ 379,874   
  

 

 

   

 

 

 

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