8-K

 

 

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) June 7, 2013

 

 

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, Pittsburgh, PA   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 7.01. Regulation FD Disclosure

On June 7, 2013, Mastech Holdings, Inc. (the “Company”) will present at Sidoti’s Micro Investor Conference in New York, NY. Attached as Exhibit 99.1 are the slides that will be presented. These slides will be available on the Company’s website at www. mastech.com.

The information in this Current Report on Form 8-K being furnished pursuant to Items 7.01 and 9.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

 

Exhibit
No.

  

Description

99.1    June 7, 2013 – Sidoti’s Micro Investor Conference presentation slides.


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, Jr.

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

June 7, 2013

EX-99.1
Q2 2013
Industry & MHH Overview
CONFIDENTIAL
Exhibit 99.1


Copyright ©2010 Mastech, Inc. All Rights Reserved.  mastech.com
2
Safe Harbor...
Certain statements contained in this presentation 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, 2012.


3
Mastech: A National Staffing Business
e-Business Solutions; Service Oriented Architecture & Web Services
Business Intelligence & Data Warehousing
ERP / CRM Implementation
Surgical Nursing & Physical / Occupational Therapy
700
full-time IT Consultants  in the USA
100
FTE Healthcare
Professionals
200 Staff Employees (Sales / Recruitment / Support / Management)
70% of Staff India-Based
Service Offerings
Employees/
Consultants
26 years
of Staffing Industry Experience (former iGATE Corporation
subsidiary)
Spun-off from iGATE in October 2008;  certified MBE
Trade on NYSE / MKT: “MHH
Only Public IT Staffing Company with “Centralized
Business Model
History
National provider of Information Technology and Specialized
Healthcare
Staffing
Services
100% of Revenues are derived from Staffing Services
Business
Description
Integrity,
Accountability,
Quality,
Dignity
&
Respect
Core Values


MHH –
Shareholder Performance
MHH 2013 YTD:
40% Increase To-Date
12 Month Trailing P/E = 9.80
Pittsburgh Business Times, Largest Public Companies Jan 2013
Finance.Yahoo.com
/
MHH
June
4,
2013


IT Employment Hits Another All-time High in April!
215K IT jobs created in the US in the past 12 months; 350K in the past 24 months
5.1% Y-O-Y Growth... 3X the Growth rate of the general workforce
17
th
consecutive month of growth;  former all time high eclipsed in Q1 2012


IT Staffing Industry Forecasted to Grow 8%


H/C Staffing Industry Forecasted to Grow 9%


Bottom Line....with USA GDP Forecasted @ 2%....
And Q1-2013 at 2.4%....


Two IT Staffing Industry Business Models...
Geographic
decentralized
control & leadership;
relationship sales
model
Gross Margin:        24-30%
S, G & A
(expenses)
:  20-25%
Operating Margins:   4-8%
Branch
Services
Model
Customers
drive Geography;  majority of
the organization centralized; 
Low Cost
Location
opportunity; 
Gross Margin:         18-21%
S, G & A
(expenses)
:   13-17%
Operating Margins:    4-8%
Centralized
Model
“prove it & move it”;
;
Value
Pricing


Professional Procurement Services Enter the Fray...
VMS
(vendor management system)
9 yr penetrationAll Buyers:       8% to 60%
9
yr
penetration-
Core
Buyers:
42%
to
73%
Technology
/ Telecomm Industry:   75%
in use; 
21% planned use   (96%)
All Large Scale (Fortune 1000):         75% or more 
in Use and nearly all planned use.


Bottom Line... Professional Procurement Processes &
Tools have changed The Staffing Industry...
Create Transparency & Level the Playing Field...
Comparisons become easier
Price & Delivery Matters
Relationships less important
Exert Pressure on Gross Margins
Low Cost Players will be advantaged
Forces Thinking to Move from Gross Margin to Operating Profit
MHH Loves ‘em...and the Branch Guys Don’t...
MHH
Operating
Profit
Increase....
Driven
by
Top
Line
Growth
and
Leverage
on the Cost Structure
2012 over 2011:  89%;   2011 over 2010:  75%
Here to Stay ...
Argue Penetration Levels & Timing


MHH exceeds market growth rates 2010-2012 
Strong Balance Sheet / Access to Capital
Returned $9.2 million to Shareholders in 2012
Q1-2012:
Dutch Auction Tender Offer within Share Buyback Program Limits
Q4-2012:
$2 / Share Special Dividend
Revenue –
19% CAGR
EPS –
89% CAGR
Consultants On Billing –
18% CAGR


Industry Trends
& Outlook
What Differentiates
Mastech
MHH: A Catalyst for Future Growth
Centralized Business Model; Scalable
Cost Structure;  Low-
Cost
Recruitment Engine
Strong Brand Recognition with both
U.S. Citizens and H1
B Visa
Professionals
Established Client-
Base of High-
Volume Consumers of Staffing
Services
Favorable Pricing / Value Proposition
for Clients
Motivated and Capable Management
Team
-
U.S. Job Market Recovery Positive for
Industry
Fundamental Shift Towards Greater
Utilization of Staffing Services
Large Consumers of Staffing Services
Employing VMS / MSP Model
Client Focus more about Consultant
Quality, Speed to Market and Value
Pricing


Bottom Line....Macro Growing;   Staffing Industry
Changes Favor Centralized Model;  MHH Performing


MHH Goals (not Guidance)
Organically Grow Revenues at +1.5X Industry Average.


MHH Goals (not Guidance)
Organically Grow Revenues at +1.5X Industry Average.
Maintain Gross Margins @ 19%.


MHH Goals (not Guidance)
Organically Grow Revenues at +1.5X Industry Average.
Maintain Gross Margins @ 19%.
Drive Operating Expenses to 13-14% of Revenue.


MHH Goals (not Guidance)
Organically Grow Revenues at +1.5X Industry Average.
Maintain Gross Margins @ 19%.
Drive Operating Expenses to 13-14% of Revenue..
Deliver Operating Margins of 6%+ of Revenue.


MHH Goals (not Guidance)
Organically Grow Revenues at +1.5X Industry Average.
Maintain Gross Margins @ 19%.
Drive Operating Expenses to 13-14% of Revenue.
Deliver Operating Margins of +6% of Revenue.
Continue to Return Capital to our Shareholders.


Q2 2013
Industry & MHH Overview
CONFIDENTIAL


MHH ... 1.5X industry Growth


MHH ... 1.5X industry Growth


Professional Procurement Services Enter the Fray...
(MSP / VMS)
MSP (managed service provider program)
5 yr penetrationAll Buyers:  34% to 54%
5
yr
penetration-
Core
Buyers:
48%
to
58%
Technology
/
Telecomm
Industry:
62%
in
use;  7% planned use   (69%)
All Large Scale (Fortune 1000):  60% in Use an
additional 10-15% planned use.