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Mastech Holdings, Inc. Reports Second Quarter 2012 Results

PITTSBURGH, July 25, 2012 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology and Specialized Healthcare staffing services, announced today its financial results for the second quarter ended June 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20100507/NE01385LOGO )

Second Quarter Results:

Revenues for the second quarter were $25.3 million, which represented a 14% increase over the corresponding quarter last year and approximately a 4% improvement over first quarter 2012 results.  Gross profit in the second quarter 2012 totaled $4.8 million compared to $4.4 million in the second quarter of 2011. Consolidated net income for the second quarter 2012 totaled $458,000, or $0.14 per diluted share, compared to $382,000, or $0.10 per diluted share, in the same period last year. 

Demand for our staffing services remained solid during the second quarter as we were able to grow our IT billable consultant-base by 5% and achieve sequential revenue growth for the eighth consecutive quarter in our healthcare staffing business.  Overall gross margins in the second quarter showed a marked improvement over the previous quarter, but continued to be impacted negatively by emerging supply-side pricing pressures in the marketplace.

Kevin Horner, Mastech's Chief Executive Officer stated, "During the quarter we maintained top-line revenue growth while aggressively growing bottom-line earnings per share.  Internally, we are committed to and focused on strengthening our recruitment capabilities and effectiveness, aimed at enhancing the value proposition that we provide to our clients.  As the supply of qualified IT and healthcare professionals continues to tighten, we believe organizations with a capable, competent recruiting and delivery engine will emerge as industry leaders."

Commenting on the Company's financial position, Jack Cronin, Mastech's Chief Financial Officer, stated, "Our balance sheet remains strong with cash on hand of $1.7 million; no outstanding debt; and access to $15.3 million of borrowing capacity.  During the first six months of 2012, our cash balances declined by $4.1 million reflecting $2.4 million of investment in operating working capital, in support of our revenue growth, and $2.5 million in common stock repurchases.

In conjunction with its second quarter earnings release, Mastech will host a conference call at 9:00 A. M. EDT on July 25, 2012 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 1, 2012.

About Mastech Holdings, Inc.:

Leveraging the power of 25 years of IT experience, Mastech (NYSE MKT: 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, 2011.

  

MASTECH HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)








June 30,

December 31,



2012

2011







            ASSETS




Current assets:




     Cash and cash equivalents 

$                    1,687

$                   5,755

     Accounts receivable, net 

14,054

11,925

     Prepaid and other current assets

1,043

1,046

     Deferred income taxes

88

177

           Total current assets

16,872

18,903







Equipment, enterprise software and leasehold improvements, net

295

273







Goodwill and intangible assets, net

443

458







Deferred  financing costs, net

60

74







Deferred income taxes

177

80







           Total  assets

$                 17,847

$               19,788







      LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




     Accounts payable

$                     1,995

$                   2,309

     Accrued payroll and related costs

4,000

4,002

     Deferred revenue and other liabilities

344

430

           Total current liabilities

6,339

6,741







           Total liabilities

6,339

6,741







Shareholders' equity:




     Common stock, par value $0.01 per share

37

37

     Additional paid-in capital

10,254

10,114

     Retained earnings

4,272

3,462

     Accumulated other comprehensive income

2

-

     Treasury stock, at cost

(3,057)

(566)

          Total shareholders' equity

11,508

13,047

           Total liabilities and shareholders' equity

$                 17,847

$               19,788






 

MASTECH HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)


Three Months ended June 30,

Six Months ended June 30,


2012

2011

2012

2011










Revenues

$                  25,312

$                    22,115

$                49,766

$                   42,016










Cost of revenues

20,483

17,677

40,477

33,734










Gross profit

4,829

4,438

9,289

8,282










Selling, general and administrative expenses

4,058

3,817

7,922

7,595










Income from operations 

771

621

1,367

687










Other income/(expense), net

(33)

(7)

(56)

(14)










Income before income taxes

738

614

1,311

673










Income tax expense

280

232

501

254










Net income

$                        458

$                         382

$                     810

$                        419










Earnings per share:







Basic

$                       0.14

$                        0.10

$                    0.24

$                       0.11

Diluted

$                       0.14

$                        0.10

$                    0.24

$                       0.11










Weighted average common shares outstanding:







Basic

3,158

3,673

3,320

3,682

Diluted

3,269

3,755

3,427

3,777









  

SOURCE Mastech Holdings, Inc.

Donna Kijowski, Manager, Investor Relations, Mastech Holdings, Inc., 888-330-5497