Mastech Holdings, Inc. Reports Second Quarter 2010 Results
PITTSBURGH, July 28, 2010 /PRNewswire via COMTEX/ --
Mastech Holdings, Inc. (NYSE Amex: MHH), a national provider of Information Technology and Specialized Healthcare staffing services, announced today its financial results for the second quarter ended June 30, 2010.
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Revenues for the quarter were $16.9 million, compared to $17.7 million reported in the corresponding quarter last year. Gross margins in the 2010 quarter increased to 19.9% compared to 19.3% for the 2009 quarter. Consolidated net income for the second quarter 2010 totaled $109,000 or $0.03 per diluted share, compared to $256,000, or $0.07 per diluted share, in the same period last year.
Demand for our IT staffing services continued to improve during the second quarter and pricing of our service offerings have stabilized. We were able to grow our billable consultant-base for the second consecutive quarter and deliver gross margin expansion during each of the last three quarters. Business activity in healthcare remains challenging. However, we have been successful in expanding our healthcare service offerings geographically, as we position ourselves to capitalize on this sector's expected recovery from its cyclical trough.
Thomas Moran, Chief Executive Officer of Mastech stated, "While we have much work ahead of us, I'm pleased with the progress that has been made over the last year. During second quarter, we achieved sequential organic revenue growth of 7.7%, our first quarterly sequential growth since fourth quarter 2007; expanded gross margins for a third consecutive quarter; and grew earnings per share, despite considerable SG&A investment aimed at accelerating future growth opportunities. We remain committed to managing our organization for sustainable long-term value creation and will be making additional SG&A investment during the second half of 2010 to enhance and expand our ability to service both our existing and prospective clients."
Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "At June 30, 2010, we had $6.1 million of cash on hand, no outstanding bank debt and access to $6.7 million of credit under our existing revolving credit facility. Additionally, our accounts receivable are in good shape with less than 2% of the outstanding balance aged for more than 90-days."
In conjunction with its second quarter earnings release, Mastech will host a conference call at 9:00 A.M. EDT on July 28, 2010 to discuss these results and to answer questions. A live webcast of this conference call will be available on the company's website, www.mastech.com. Simply click on the Investor Relations section and follow the links to the live webcast. The webcast will remain available for replay through August 4, 2010.
About Mastech Holdings, Inc.:
Leveraging the power of 20 years of IT experience, Mastech (NYSE Amex: MHH) provides Information Technology Staffing services in the disciplines which drive today's business operations and Specialized Healthcare Staffing services to hospitals and other healthcare facilities. More information about Mastech can be found at Mastech's website: www.mastech.com.
Forward-Looking Statements:
Certain statements contained in this release are forward-looking statements based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of revenues, earnings, and cash flow. These statements are based on information currently available to the Company and it assumes no obligation to update the forward-looking statements as circumstances change. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors, including, without limitation, the level of market demand for its services, the highly competitive market for the types of services offered by the company, the impact of competitive factors on profit margins, market conditions that could cause the Company's customers to reduce their spending for its services, and the company's ability to create, acquire and build new lines of business, to attract and retain qualified personnel, reduce costs and conserve cash, and other risks that are described in more detail in the company's filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2009.
MASTECH HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
December
June 30, 31,
2010 2009
---- ----
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $6,101 $7,113
Accounts receivable, net 8,181 7,232
Prepaid and other current assets 690 401
Deferred income taxes 256 312
--- ---
Total current assets 15,228 15,058
Investment in unconsolidated affiliate 5 5
Equipment, enterprise software and leasehold 150 160
improvements, net
Goodwill and intangible assets, net 629 -
Deferred income taxes 82 87
--- ---
Total assets $16,094 $15,310
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $57 $-
Accounts payable 1,638 1,653
Accrued payroll and related costs 2,433 2,179
Deferred revenue and other liabilities 161 226
--- ---
Total current liabilities 4,289 4,058
Long-term debt 68 -
--- ---
Total liabilities 4,357 4,058
Shareholders' equity:
Common stock, par value $0.01 per share 37 36
Additional paid-in capital 9,843 9,530
Retained earnings 1,857 1,686
----- -----
Total shareholders' equity 11,737 11,252
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Total liabilities and shareholders' equity $16,094 $15,310
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MASTECH HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(unaudited)
Three Months ended Six Months ended
June 30, June 30,
------------------ ----------------
2010 2009 2010 2009
---- ---- ---- ----
Revenues $16,920 $17,675 $32,637 $38,233
Cost of revenues 13,556 14,271 26,198 30,986
------ ------ ------ ------
Gross profit 3,364 3,404 6,439 7,247
Selling, general and
administrative 3,125 2,888 6,058 5,788
Depreciation and
amortization 50 82 79 167
--- --- --- ---
Income from operations 189 434 302 1,292
Other income/(expense),
net (8) (3) (14) (30)
Income before income taxes 181 431 288 1,262
Income tax expense 72 175 116 511
--- --- --- ---
Net income $109 $256 $172 $751
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Earnings per share:
Basic $0.03 $0.07 $0.05 $0.21
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Diluted $0.03 $0.07 $0.05 $0.21
===== ===== ===== =====
Weighted average common
shares
outstanding:
Basic 3,676 3,607 3,655 3,607
===== ===== ===== =====
Diluted 3,749 3,666 3,739 3,654
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SOURCE Mastech Holdings, Inc.