UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 7, 2009
Mastech Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania
(State or Other Jurisdiction of Incorporation)
| 001-34099 | 26-2753540 | |
| (Commission File Number) | (IRS Employer Identification No.) |
| 1000 Commerce Drive, Suite 500 | 15275 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(412) 787-2100
(Registrant’s Telephone Number, Including Area Code)
N/A
(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 (see General Instruction A.2. below):
| ¨ | 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)) |
| Item 2.02. | Results of Operations and Financial Condition |
On May 7, 2009, Mastech Holdings, Inc. issued a press release announcing its financial results for the first quarter ended March 31, 2009. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information contained herein 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 |
(c) The following exhibit is furnished with this Form 8-K:
| 99.1 | Press Release issued by Mastech Holdings, Inc. on May 7, 2009. |
SIGNATURES
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.
| MASTECH HOLDINGS, INC. | ||
| By: | /s/ John J. Cronin | |
| Name: | John J. Cronin | |
| Title: | Chief Financial Officer, Secretary, and Treasurer | |
May 7, 2009
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press Release From Mastech Holdings, Inc., dated May 7, 2009. |
Exhibit 99.1
FOR IMMEDIATE RELEASE:
Mastech Holdings, Inc. Reports 2009 First Quarter Results
PITTSBURGH, PA – May 7, 2009 - Mastech Holdings, Inc., (NYSE Amex: MHH – News), a national provider of Information Technology staffing services, announced today its financial results for the first quarter ended March 31, 2009.
Revenues for the quarter were $20.6 million, which represents a 17.7% decline from the $25.0 million reported in the corresponding quarter last year. Consolidated net income for the first quarter 2009 totaled $495,000, or $0.14 per diluted share, compared to $1.0 million, or $0.27 per diluted share, in the same period last year. The Company’s results in the first quarter of 2008 included certain income tax benefits derived from the Company’s participation in its former parent’s consolidated U.S. tax return, which are not available to the Company as a stand alone organization. The impact of such tax benefits on consolidated net income totaled $332,000 or $0.09 per diluted share, in the first quarter of 2008.
Business activity during the first quarter of 2009 remained at low levels. As a result, billable IT consultant headcount declined by approximately 4% during the period. Additionally, the completion of a major assignment in brokerage operations in late-March resulted in a 7% reduction to total billable consultant headcount. The impact of this project completion and related reduction in revenues is not fully reflected in the Company’s first quarter operating results, as it occurred late in the quarter.
Sunil Wadhwani, Interim Chief Executive Officer of Mastech stated, “The recession continued to impact our operations during the first quarter of 2009. While the decline in activity levels seems to be moderating, pricing pressures continue to accelerate, not only for new assignments, but on existing assignments as well. We expect these pressures to persist in the short term and have taken prudent actions to adjust our resource costs to reflect prevailing market conditions. Additionally, we continue to closely manage our operating cost structure and take steps to improve our competitiveness in advance of the economic recovery process.”
Commenting on the Company’s financial position, Jack Cronin, Chief Financial Officer, stated, “At March 31, 2009 we had $5.6 million of cash and cash equivalents on hand, no outstanding long-term debt, and access to approximately $8 million of credit under our existing loan facility. While we can’t control the economic environment in which we compete, we do believe that our commitment to cost containment, operating efficiencies and capital preservation will position us to take advantage of opportunities that generally surface during the trough of an economic cycle.”
In conjunction with its first quarter earnings release, Mastech will host a conference call at 9:00 A. M. EST on May 7, 2009 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 May 14, 2009.
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. 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, segment performance, 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.
# # #
For more information, contact:
Donna Mascia
Manager, Investor Relations
Mastech Holdings, Inc.
888.330.5497
MASTECH HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(unaudited)
| March 31, 2009 |
December 31, 2008 | |||||
| ASSETS | ||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 5,619 | $ | 4,361 | ||
| Accounts receivable, net |
9,586 | 9,240 | ||||
| Prepaid and other current assets |
322 | 376 | ||||
| Deferred income taxes |
306 | 253 | ||||
| Total current assets |
15,833 | 14,230 | ||||
| Investment in unconsolidated affiliate |
9 | 41 | ||||
| Equipment, enterprise software and leasehold improvements, net |
234 | 235 | ||||
| Deferred income taxes |
190 | 191 | ||||
| Total assets |
$ | 16,266 | $ | 14,697 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 2,230 | $ | 2,454 | ||
| Accrued payroll and related costs |
3,295 | 2,555 | ||||
| Deferred revenue and other |
778 | 285 | ||||
| Total current liabilities |
6,303 | 5,294 | ||||
| Total liabilities |
6,303 | 5,294 | ||||
| Shareholders’ equity: |
||||||
| Common stock, par value $0.01 per share |
36 | 36 | ||||
| Additional paid-in capital |
9,143 | 9,078 | ||||
| Retained earnings |
784 | 289 | ||||
| Total shareholders’ equity |
9,963 | 9,403 | ||||
| Total liabilities and shareholders’ equity |
$ | 16,266 | $ | 14,697 | ||
MASTECH HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(unaudited)
| Three Months ended March 31, | |||||||
| 2009 | 2008 | ||||||
| Revenues |
$ | 20,558 | $ | 24,974 | |||
| Cost of revenues |
16,715 | 20,041 | |||||
| Gross profit |
3,843 | 4,933 | |||||
| Selling, general and administrative |
2,900 | 3,810 | |||||
| Depreciation and amortization |
85 | 81 | |||||
| Income from operations |
858 | 1,042 | |||||
| Other income/(expense), net |
(27 | ) | 4 | ||||
| Income before income taxes |
831 | 1,046 | |||||
| Income tax expense |
336 | 74 | |||||
| Net income |
$ | 495 | $ | 972 | |||
| Earnings per share: |
|||||||
| Basic |
$ | 0.14 | $ | 0.27 | |||
| Diluted |
$ | 0.14 | $ | 0.27 | |||
| Weighted average common shares outstanding: |
|||||||
| Basic |
3,607 | 3,607 | |||||
| Diluted |
3,632 | 3,607 | |||||