Form 8-K














Date of report (Date of earliest event reported): April 28, 2021




(Exact Name of Registrant as Specified in Its Charter)




Pennsylvania   001-34099   26-2753540

(State or Other Jurisdiction

of Incorporation)



File Number)


(IRS Employer

Identification No.)

1305 Cherrington Parkway, Suite 400

Moon Township, PA

(Address of Principal Executive Offices)   (Zip Code)

(412) 787-2100

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class





Name of each exchange

on which registered

Common Stock, par value $.01 per share   MHH   NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐




Item 2.02

Results of Operations and Financial Condition.

On April 28, 2021, Mastech Digital, Inc. issued a press release (the “Press Release”) announcing its financial results for the first quarter ended March 31, 2021. A copy of the Press Release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Item 2.02 and in the accompanying exhibit shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.


Item 9.01

Financial Statements and Exhibits.

(d) The following exhibit is furnished with this Form 8-K:





99.1    Press Release issued by Mastech Digital, Inc. on April 28, 2021.




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



/s/ John J. Cronin, Jr.

Name:   John J. Cronin, Jr.
Title:   Chief Financial Officer

April 28, 2021


Exhibit 99.1




Mastech Digital Reports First Quarter 2021 Results

Strong Customer Demand Resulted in Additional Hiring and S,G&A Investments During the First Quarter

PITTSBURGH, PA – April 28, 2021—Mastech Digital, Inc. (NYSE American: MHH), a leading provider of Digital Transformation IT Services, announced today its financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Highlights:



Consolidated revenues totaled $49.8 million, a 2% sequential increase over fourth quarter 2020;



The Company’s Data and Analytics Services segment reported a strong bookings performance during the quarter, despite flat revenues as compared to the previous quarter;



Customer demand improved as the COVID-19 situation recovers in North America and drives our S,G&A investments to capture anticipated future revenues;



The IT Staffing Services segment added a record 99 consultants-on-billing, an increase of 9% during the quarter, as the demand for its services continued to increase;



Consolidated gross margins increased 50-basis points on a year-over-year basis;



GAAP diluted earnings per share were $0.10 in the first quarter of 2021 versus $0.16 in the first quarter of 2020;



Non-GAAP diluted earnings per share were $0.19 in the first quarter of 2021 versus $0.23 in the first quarter of 2020.

First Quarter Results:

Revenues for the first quarter of 2021 totaled $49.8 million, compared to $50.4 million during the corresponding quarter last year. Gross profits in the first quarter of 2021 were $12.8 million, compared to $12.7 million in the same quarter of 2020. GAAP net income for the first quarter of 2021 totaled $1.2 million or $0.10 per diluted share, compared to $1.9 million or $0.16 per diluted share during the same period last year. Non-GAAP net income for the first quarter of 2021 was $2.2 million or $0.19 per diluted share, compared to $2.7 million or $0.23 per diluted share in the first quarter of 2020.

Activity levels at the Company’s Data and Analytics Services segment were flat during the quarter when compared to last quarter, despite a much stronger bookings performance. Project delays materially impacted first quarter results in terms of revenues, gross margins and bottom-line results. Demand for the Company’s IT Staffing Services segment increased materially during the quarter, with a 9% expansion in billable-consultants, which essentially offset the billable headcount decline the Company experienced during the pandemic-impacted first-half of 2020.

Vivek Gupta, the Company’s President and Chief Executive Officer stated “While customers continued to be cautious in starting new projects in the data and analytics space, our IT Staffing Services segment saw a material increase in new assignment opportunities during the quarter. The increase in D&A bookings, particularly in the latter part of the quarter, gives us confidence that the Data and Analytics segment is well positioned for meaningful growth for the year.”



Further commenting on the data & analytics marketplace, Paul Burton, the Chief Executive of the Company’s Data & Analytics Services segment said “We are seeing encouraging signs that customers are becoming more comfortable commencing new projects. We believe this trend, combined with pent-up global demand, positions the segment for strong revenue growth for the remainder of the year as compared to 2020.”

Commenting on the Company’s financial position, Jack Cronin, Mastech Digital’s Chief Financial Officer, stated, “At March 31, 2021 we had cash balances on hand of $7.2 million, no borrowings under our revolving credit facility, and cash availability of approximately $25 million.”

About Mastech Digital, Inc.:

Mastech Digital (NYSE American: MHH) is a leading provider of Digital Transformation IT Services. The Company offers Data Management and Analytics Solutions, Digital Learning, and IT Staffing Services with a Digital First approach. A minority-owned enterprise, Mastech Digital is headquartered in Pittsburgh, PA with offices across the U.S., Canada, EMEA, India and ASEAN.

Use of Non-GAAP Measures:

This press release contains non-GAAP financial measures to supplement our financial results presented on a GAAP basis. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Reconciliations of these non-GAAP measures to their comparable GAAP measures are included in the attached financial tables.

We believe that providing non-GAAP net income and non-GAAP diluted earnings per share offers investors useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allows for greater transparency with respect to key metrics used by management in operating our business. Additionally, management uses these non-GAAP financial measures in evaluating the Company’s performance.

Specifically, the non-GAAP financial measures contained herein exclude the following expense items:

Amortization of acquired intangible assets: We amortize intangible assets acquired in connection with our June 2015 acquisition of Hudson IT, our July 2017 acquisition of the services division of InfoTrellis, Inc. and our October 2020 acquisition of AmberLeaf Partners. We exclude these amortization expenses in our non-GAAP financial measures because we believe it allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates a helpful comparison of our results with other periods.

Stock-based compensation expenses: We incur material recurring expense related to non-cash, stock-based compensation. We exclude these expenses in our non-GAAP financial measures because we believe that it provides investors with meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under ASC 718, we believe that providing non-GAAP financial measures that exclude these expenses allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates comparison of our results with other periods.



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 (i) projections of revenues, earnings, and cash flow, and (ii) statements regarding the expected benefits to the Company from the completion of the AmberLeaf acquisition. 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 forecasted in forward-looking statements due to a variety of factors, including, without limitation, the level of market demand for the Company’s 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, the Company’s ability to create, acquire and build new lines of business, to attract and retain qualified personnel, reduce costs and conserve cash, the extent to which the Company’s business is adversely affected by the impacts of the COVID-19 pandemic and governmental responses to limit the further spread of COVID-19 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, 2020.

# # #

For more information, contact:

Donna Kijowski

Manager, Investor Relations

Mastech Digital, Inc.




(Amounts in thousands)



     March 31,     December 31,  
     2021     2020  



Current assets:


Cash and cash equivalents

   $ 7,242     $ 7,677  

Accounts receivable, net

     36,206       32,134  

Prepaid and other current assets

     1,238       1,346  







Total current assets

     44,686       41,157  

Equipment, enterprise software and leasehold improvements, net

     1,895       1,971  

Operating lease right-of-use assets

     3,199       3,286  

Deferred income taxes

     804       796  

Non-current deposits

     459       396  

Goodwill, net of impairment

     32,510       32,510  

Intangible assets, net

     21,137       21,930  







Total assets

   $ 104,690     $ 102,046  









Current liabilities:


Current portion of long-term debt

   $ 4,400     $ 4,400  

Current portion of operating lease liability

     1,056       1,079  

Accounts payable

     3,915       2,589  

Accrued payroll and related costs

     12,882       12,374  

Other accrued liabilities

     1,571       1,529  







Total current liabilities

     23,824       21,971  

Long-term liabilities:


Long-term debt, less current portion, net

     11,795       12,875  

Contingent consideration liability

     2,882       2,882  

Long-term operating lease liability, less current portion

     2,273       2,325  

Long-term accrued income taxes

     165       165  

Long-term payroll tax liabilities

     2,295       2,295  







Total liabilities

     43,234       42,513  

Shareholders’ equity:


Common stock, par value $0.01 per share

     130       130  

Additional paid-in capital

     26,231       25,509  

Retained earnings

     39,814       38,620  

Accumulated other comprehensive income (loss)

     (532     (539

Treasury stock, at cost

     (4,187     (4,187







Total shareholders’ equity

     61,456       59,533  







Total liabilities and shareholders’ equity

   $ 104,690     $ 102,046  









(Amounts in thousands, except per share data)



     Three Months ended March 31,  
     2021     2020  


   $ 49,775     $ 50,425  

Cost of revenues

     36,971       37,706  







Gross profit

     12,804       12,719  

Selling, general and administrative expenses

     10,935       10,243  







Income from operations

     1,869       2,476  

Other income/(expense), net

     (232     (226







Income before income taxes

     1,637       2,250  

Income tax expense

     443       381  







Net income

   $ 1,194     $ 1,869  







Earnings per share:



   $ 0.10     $ 0.17  


   $ 0.10     $ 0.16  

Weighted average common shares outstanding:



     11,415       11,127  








     11,997       11,675  









(Amounts in thousands, except per share data)



     Three Months ended March 31,  
     2021     2020  

GAAP Net Income

   $ 1,194     $ 1,869  



Amortization of acquired intangible assets

     793       673  

Stock-based compensation

     621       456  

Income taxes adjustments

     (365     (296







Non-GAAP Net Income

   $ 2,243     $ 2,702  







GAAP Diluted Earnings Per Share

   $ 0.10     $ 0.16  







Non-GAAP Diluted Earnings Per Share

   $ 0.19     $ 0.23  







Weighted average common shares outstanding:


GAAP Diluted Shares

     11,997       11,675  







Non-GAAP Diluted Shares

     11,997       11,675  











(Amounts in thousands)



     Three Months ended March 31,  
     2021     2020  



Data and analytics services

   $ 8,794     $ 7,360  

IT staffing services

     40,981       43,065  







Total revenues

   $ 49,775     $ 50,425  







Gross Margin %:


Data and analytics services

     45.7     47.1

IT staffing services

     21.4     21.5







Total gross margin %

     25.7     25.2







Segment Operating Income:


Data and analytics services

     394       909  

IT staffing services

   $ 2,268     $ 2,240  








     2,662       3,149  

Amortization of acquired intangible assets

     (793     (673

Interest expense and other, net

     (232     (226







Income before income taxes

   $ 1,637     $ 2,250