Reports Improved Net Income and Gross Profit Margins
SPRINGFIELD, Va., Feb. 11, 2013 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fiscal second quarter ended December 28, 2012.
Net income for the second quarter of fiscal year 2013 was $0.9 million or $0.10 per basic and diluted share, an increase of 12.5% compared to net income of $0.8 million or $0.09 per basic and diluted share in the second quarter of fiscal 2012.
The Company achieved gross profit margins of 15.3% in the second quarter as compared to 11.0% in the same quarter last year and operating income margins improved to 6.1% from 4.2% in the same quarter last year. The improved margins were largely due to the Company's continued focus on controlling costs and improving project management.
Gross revenue for the second quarter of fiscal year 2013 was $24.7 million, a decrease of 21.1% compared to revenue of $31.3 million reported in the second quarter of fiscal year 2012. This decrease was a result of anticipated reductions in government spending for international reconstruction operations and construction management services in Iraq. This slowdown was coupled with lower domestic revenue of $1.8 million related to Versar's completion of the Tooele Chemical Demilitarization project in fiscal year 2012. However, the recent award of the $170 million Afghan PSC IDIQ will increase our work in Afghanistan.
For the first six months of fiscal year 2013, Versar recorded gross revenue of $48.3 million. While this was a 25.2% decrease compared to revenue of $64.6 million in the first six months of last fiscal year, gross profit margin improved to 14.7% of sales, compared to a gross profit margin of 11.1% in the first six months of the prior year. Operating income increased 11.5% in the first half of fiscal year 2013 to $2.9 million from $2.6 million in the same period last year. Versar achieved net income of $1.8 million or $0.19 per basic and diluted share in the first six months of fiscal year 2013 compared to $1.6 million or $0.18 per basic and diluted share in the first six months of fiscal year 2012.
As of December 28, 2012, Versar recorded funded backlog of approximately $118 million, an increase of 39% compared to approximately $85 million at December 30, 2011. This increase was due largely to new awards won related to new work in Afghanistan and our performance-based remediation projects ("PBR") for the U.S Air Force at various installations across the United States.
Subsequent to the end of the quarter, Versar announced its selection as prime contractor to perform performance-based remediation (PBR) for the New England Region. The initial funded award value is $10.5 million, with options totaling $4.5 million for a potential contract total of $15 million over the next eight years. These services will be performed for the Air Force Civil Engineer Center (AFCEC) under the WERC09 contract at Hanscom Air Force Base, MA; New Boston Air Reserve Station, MA; Westover Air Reserve Base, MA; and Niagara Air Reserve Station, NY.
Tony Otten, CEO of Versar said, "We have achieved another quarter of solid profitability, improved margins and strengthened backlog. While we saw an anticipated decline in revenues related to the reduction in government spending in Iraq and wind down of Title II work in Afghanistan in the first half of this fiscal year, we are now fully ramped up on our Afghanistan Personal Services contract. We continue to make progress in securing significant contracts for opportunities related to non-discretionary funding such as sustainable range management, unexploded ordnance and performance based remediation (PBR). The recent New England Region Air Force award is our fourth major AFCEC PBR award in just over a year and clearly validates our capabilities in accomplishing remediation and compliance activities at contaminated sites. We continue to pursue opportunities to provide our expertise to assist our existing and new partners with effective and permanent solutions and identifying new partners."
Mr. Otten concluded, "Our balance sheet is strong with over $13 million in cash and working capital of $25 million, positioning us well to drive organic growth as well as to pursue acquisitions."
The Company will host a conference call today, February 11 at 2:00 p.m. Eastern Time to discuss its operational performance and financial results. The conference call may be accessed in the U.S. and Canada by dialing toll-free (877) 407-8033. International callers may access the call by dialing (201) 689-8033.
Participants should call in a few minutes before 2:00 p.m. Eastern time. For those unable to attend the conference call, replays will be available on Versar's website, www.versar.com.
VERSAR, INC., headquartered in Springfield, Virginia, is a publicly traded global project management company providing sustainable value oriented solutions to government and commercial clients in the construction management, environmental services, munitions response, and professional services market areas.
This news release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended June 29, 2012, as updated from time to time in the Company's periodic filings. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements.
Michael J. Abram
John Nesbett or Jennifer Belodeau
Senior Vice President
Institutional Marketing Services (IMS)
VERSAR, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
Cash and cash equivalents
Accounts receivable, net
Prepaid expenses and other current assets
Deferred income taxes
Total current assets
Property and equipment, net
Deferred income taxes, non-current
Intangible assets, net
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued salaries and vacation
Other current liabilities
Income tax payable
Notes payable, current
Total current liabilities
Notes payable, non-current
Deferred income taxes
Other long-term liabilities
Commitments and contingencies
Common stock, $.01 par value; 30,000,000 shares
authorized; 9,792,873 shares and 9,645,149 shares issued; 9,525,560
shares and 9,391,575 shares outstanding
Capital in excess of par value
Treasury stock, at cost (267,313 and 253,574 shares, respectively)
Accumulated other comprehensive loss; foreign currency translation
Total stockholders' equity
Total liabilities and stockholders' equity
VERSAR, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited - in thousands, except per share amounts)
For the Three Months Ended
For the Six Months Ended
Purchased services and materials, at cost
Direct costs of services and overhead
Selling, general and administrative expenses
OTHER (INCOME) EXPENSE
INCOME BEFORE INCOME TAXES
Income tax expense
NET INCOME PER SHARE – BASIC
NET INCOME PER SHARE – DILUTED
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
SOURCE Versar, Inc.
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