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Mastech Holdings, Inc. Reports First Quarter 2014 Results:

PITTSBURGH, April 23, 2014 /PRNewswire/ --

  • 20% Year-Over-Year Revenue Growth from Continuing Operations;
  • 58% Year-Over-Year Increase in Operating Profits from Continuing Operations;
  • 54% Year-Over-Year Increase in Diluted Earnings Per Share from Continuing Operations;
  • 3% Sequential Increase in Consultants on Billing.

Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology staffing services, announced today its financial results for the first quarter ended March 31, 2014.

Mastech Holdings, Inc.

First Quarter Results:

Revenues from continuing operations for the first quarter of 2014 totaled $28.7 million, which represented a 20% increase over the corresponding quarter last year.  Gross profit from continuing operations in the first quarter of 2014 was $5.2 million compared to $4.4 million in the first quarter of 2013. Consolidated net income from continuing operations for the first quarter 2014 totaled $869,000 or $0.20 per diluted share, compared to $544,000 or $0.13 per diluted share, during the same period last year.  

Demand for our IT staffing services was solid in the first quarter and largely in-line with activity levels of a quarter ago.  Gross margins from continuing operations in the first quarter of 2014 were 18.2%, which equaled those reported a year earlier.  Historically, gross margins in the first quarter are negatively impacted by higher payroll taxes and bench costs.

Kevin Horner, Mastech's Chief Executive Officer stated, "We are pleased to deliver strong year-over-year financial results in our traditionally challenging first quarter, as we were able to increase our billable consultant-base by approximately 3%.  Operationally, we continue to strive for productivity gains in both our sales and recruitment organizations."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our financial position at March 31, 2014 remains strong, with short-term borrowings, net of cash balances on hand, of $1.1 million and over $15 million of available borrowing capacity under our existing credit facility.  During the quarter we invested $2.6 million in operating working capital.  This level of investment was in part due to an up-tick in our Days Sales Outstanding measurement during the quarter related to billing process changes at a major client.  We are confident that DSO's will revert back to more normal levels in the second quarter of 2014."  

In conjunction with its first quarter earnings release, Mastech will host a conference call at 9:00 A. M. ET on April 23, 2014 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 April 30, 2014.

About Mastech Holdings, Inc.:

Leveraging the power of 27 years of IT experience, Mastech (NYSE MKT: MHH) provides Information Technology Staffing services in the disciplines which drive today's business operations. 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, 2013.

 

MASTECH HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)







March 31,


December 31,



2014


2013






ASSETS





Current assets:





     Cash and cash equivalents 


$         508


$               424

     Accounts receivable, net 


17,884


15,011

     Prepaid and other current assets


883


822

     Deferred income taxes


199


143

           Total current assets


19,474


16,400






Equipment, enterprise software and leasehold improvements, net


158


174






Deferred income taxes


184


248






Deferred  financing costs, net


11


19






Non-current deposits


212


210






           Total  assets


$  20,039


$        17,051






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities:





     Short-term borrowings


$      1,632


$                 12

     Accounts payable


1,886


2,026

     Accrued payroll and related costs


5,699


5,202

     Deferred revenue and other liabilities


334


351

           Total current liabilities


9,551


7,591






           Total liabilities


9,551


7,591






Shareholders' equity:





     Common stock, par value $0.01 per share


50


50

     Additional paid-in capital


12,323


11,924

     Retained earnings


1,470


601

     Accumulated other comprehensive income


48


16

     Treasury stock, at cost


(3,403)


(3,131)

          Total shareholders' equity


10,488


9,460

           Total liabilities and shareholders' equity


$  20,039


$        17,051






 

 

MASTECH HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)


Three Months ended March 31,


2014


2013





Revenues

$      28,684


$      24,000





Cost of revenues

23,459


19,629





Gross profit

5,225


4,371





Selling, general and administrative expenses

3,831


3,488





Income from  operations 

1,394


883





Other income/(expense), net

8


(13)





Income from continuing operations before income taxes

1,402


870





Income tax expense

533


326

Net income from continuing operations

869


544





Net income from discontinued operations

-


31





Net Income

$           869


$           575









Earnings per share:




     Basic:




        Continuing  operations

$          0.20


$          0.13

        Discontinued operations

-


0.01

                       Total

$          0.20


$          0.14





     Diluted:




        Continuing  operations

$          0.20


$          0.13

        Discontinued operations

-


0.01

                       Total

$          0.20


$          0.13









Weighted average common shares outstanding:




Basic

4,310


4,177

Diluted

4,440


4,282





 

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SOURCE Mastech Holdings, Inc.

Donna Kijowski, Manager, Investor Relations, Mastech Holdings, Inc., 888.330.5497