EX-99.1 3 ex99-1.htm EXHIBIT 99.1 Exhibit 99.1


 
 
Contacts:
Sard Verbinnen & Co
Hugh Burns/Jamie Tully
(212) 687-8080
URS Corporation   
H. Thomas Hicks      
Vice President      
& Chief Financial Officer
(415) 774-2700

URS CORPORATION REPORTS FIRST QUARTER
RESULTS FOR FISCAL 2007

Revenues Up 14 Percent, EPS Up 23 Percent
From First Quarter 2006



SAN FRANCISCO, CA - May 2, 2007 - URS Corporation (NYSE: URS) today reported its financial results for the first quarter of fiscal 2007, which ended on March 30, 2007. Revenues for the quarter were $1.14 billion, compared with revenues of $998.1 million during the comparable period in 2006, an increase of 14%. Net income was $30.4 million, 26% higher than the $24.2 million reported for the corresponding period in 2006. Earnings per share (“EPS”) of $0.58, fully diluted, increased 23%, compared with EPS of $0.47, fully diluted, for the same period last year.
 
As of March 30, 2007, the Company’s backlog was $5.02 billion, compared to $4.64 billion as of December 29, 2006, an increase of 8%.
 
Commenting on the Company’s financial results, Martin M. Koffel, Chairman and Chief Executive Officer, stated: “URS performed very well in the first quarter. We saw strong growth in the private sector, primarily due to increased capital spending by our clients in the power and oil and gas industries. At the same time, revenues from our state and local government sector business grew significantly as a result of the growth in public investment in transportation, facilities and other infrastructure programs.”
 
Mr. Koffel continued: “The long term trends in all of our key markets look favorable, including demand for the engineering and operations and maintenance services we provide to federal government agencies. The Company is well positioned to benefit from these trends, and we remain on track to meet our financial objectives for the year.”
 
For the purpose of calculating diluted EPS, weighted-average shares outstanding for the first quarter of 2007 were 52.1 million, compared to 51.3 million for the corresponding period last year.

Business Segments
 
In addition to providing consolidated financial results, URS reports separate financial information for its two segments: the URS Division and the EG&G Division. The URS Division’s revenues include the Company’s work in the state and local government market, the private sector and the international business. In addition, the URS Division provides engineering services to federal government agencies, primarily for contingency contracts and facilities and environmental projects. The EG&G Division primarily serves the federal government market, providing a range of operations and maintenance and technical support services to the Departments of Defense, Homeland Security, Energy, Treasury and NASA, among others.
 
URS Division. For the first quarter of fiscal 2007, the URS Division reported revenues of $793.4 million and operating income of $55.3 million, compared to revenues of $643.3 million and operating income of $42.3 million for the corresponding period in 2006.
 
EG&G Division. For the first quarter of fiscal 2007, the EG&G Division reported revenues of $345.0 million and operating income of $16.2 million, compared to revenues of $360.4 million and operating income of $15.3 million for the corresponding period in 2006.

Outlook for the Remainder of Fiscal 2007
 
The Company reaffirmed its expectation that fiscal 2007 revenues will be approximately $4.65 billion. Assuming this revenue expectation is met, the Company continues to expect that 2007 net income will be approximately $128 million and now expects that earnings per share will be at the high end of the $2.40 to $2.45 range previously announced.
 
In addition, the Company continues to expect its effective tax rate for 2007 to be approximately 42.0%, compared to 42.6% in 2006. Finally, the Company’s weighted average shares outstanding for 2007 is expected to be 53.2 million, compared with 51.7 million in 2006. 



Web Cast Information
 
URS will host a dial-in conference call on Thursday, May 3 at 11:00 a.m. (EDT) to discuss its first quarter fiscal 2007 results. A live web cast of this call will be available on the investor relations portion of URS’ website at www.urscorp.com.
 
URS Corporation offers a comprehensive range of professional planning and design, systems engineering and technical assistance, program and construction management, and operations and maintenance services for transportation, facilities, environmental, water/wastewater, industrial infrastructure and process, homeland security, installations and logistics, and defense systems. Headquartered in San Francisco, the Company operates in more than 20 countries with approximately 29,500 employees providing engineering and technical services to federal, state and local governmental agencies as well as private clients in the chemical, pharmaceutical, oil and gas, power, manufacturing, mining and forest products industries (www.urscorp.com).
 

 
 
TABLES TO FOLLOW
 
# # #
 
Statements contained in this earnings release that are not historical facts may constitute forward-looking statements, including statements relating to future revenues, future earnings, future tax rates, future outstanding shares and future economic and industry conditions. The Company believes that its expectations are reasonable and are based on reasonable assumptions. However, such forward-looking statements by their nature involve risks and uncertainties that could cause actual results to differ materially from the results predicted. The potential risks and uncertainties include, but are not limited to: an economic downturn; changes in the Company’s book of business; the Company’s compliance with government contract procurement regulations; the Company’s ability to procure government contracts; the Company’s reliance on government appropriations; the ability of the government to unilaterally terminate the Company’s contracts; the Company’s ability to make accurate estimates and control costs; the Company’s ability to win or renew contracts; the Company’s and its partners’ ability to bid on, win, perform and renew contracts and projects; environmental issues and liabilities; liabilities for pending and future litigation; the impact of changes in laws and regulations; a decline in defense spending; industry competition; the Company’s ability to attract and retain key individuals; employee, agent or partner misconduct; risks associated with changes in equity-based compensation requirements; the Company’s leveraged position and ability to service its debt; risks associated with international operations; business activities in high security risk countries; third party software risks; terrorist and natural disaster risks; the Company’s relationships with its labor unions; the Company’s ability to protect its intellectual property rights; anti-takeover risks and other factors discussed more fully in the Company's Form 10-K for its fiscal year ended December 29, 2006, as well as in other reports filed from time to time with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements.







URS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except per share data)

   
March 30, 2007
 
December 29, 2006
 
ASSETS
         
Current assets:
         
Cash and cash equivalents, including $13,155 and $44,557 of short-term money market funds, respectively
 
$
64,854
 
$
89,502
 
Accounts receivable, including retainage of $37,332 and $37,368, respectively
   
609,151
   
680,631
 
Costs and accrued earnings in excess of billings on contracts in process
   
606,836
   
552,526
 
Less receivable allowances
   
(41,515
)
 
(50,458
)
Net accounts receivable
   
1,174,472
   
1,182,699
 
Deferred tax assets
   
35,900
   
36,547
 
Prepaid expenses and other assets
   
78,486
   
65,405
 
Total current assets
   
1,353,712
   
1,374,153
 
Property and equipment at cost, net
   
166,064
   
163,142
 
Goodwill
   
990,905
   
989,111
 
Purchased intangible assets, net
   
3,589
   
3,839
 
Other assets
   
44,318
   
50,784
 
   
$
2,558,588
 
$
2,581,029
 
 
LIABILITIES, MINORITY INTEREST, AND STOCKHOLDERS’ EQUITY
 
             
Current liabilities:
             
Book overdrafts
 
$
31,136
 
$
3,334
 
Current portion of long-term debt
   
16,472
   
19,120
 
Accounts payable and subcontractors payable, including retainage of $20,626 and $19,515, respectively 
   
289,895
   
290,651
 
Accrued salaries and wages
   
179,486
   
230,905
 
Accrued expenses and other
   
63,836
   
73,704
 
Billings in excess of costs and accrued earnings on contracts in process
   
126,109
   
168,271
 
Total current liabilities
   
706,934
   
785,985
 
Long-term debt
   
151,214
   
149,494
 
Deferred tax liabilities
   
16,570
   
17,808
 
Other long-term liabilities
   
129,362
   
117,586
 
Total liabilities
   
1,004,080
   
1,070,873
 
Commitments and contingencies
             
Minority interest
   
5,317
   
3,469
 
Stockholders’ equity:
             
Preferred stock, authorized 3,000 shares; no shares outstanding
   
   
 
Common shares, par value $.01; authorized 100,000 shares; 53,004 and 52,309 shares issued, respectively; and 52,952 and 52,257 shares outstanding, respectively
   
530
   
523
 
Treasury stock, 52 shares at cost
   
(287
)
 
(287
)
Additional paid-in capital
   
989,347
   
973,892
 
Accumulated other comprehensive loss
   
(2,668
)
 
(3,638
)
Retained earnings
   
562,269
   
536,197
 
Total stockholders’ equity
   
1,549,191
   
1,506,687
 
   
$
2,558,588
 
$
2,581,029
 







URS CORPORATION AND SUBSIDIARIES
(In thousands, except per share data)


   
Three Months Ended
 
   
March 30,
2007
 
March 31,
2006
 
           
Revenues
 
$
1,135,595
 
$
998,149
 
Direct operating expenses
   
741,554
   
631,304
 
Gross profit
   
394,041
   
366,845
 
Indirect, general and administrative expenses
   
336,355
   
319,171
 
Operating income
   
57,686
   
47,674
 
Interest expense
   
3,940
   
5,135
 
Income before income taxes and minority interest
   
53,746
   
42,539
 
Income tax expense
   
22,306
   
17,993
 
Minority interest in income of consolidated subsidiaries, net of tax
   
1,079
   
358
 
Net income
   
30,361
   
24,188
 
Other comprehensive income (loss):
             
    Minimum pension liability adjustments, net of tax benefit
   
   
(2,366
)
Foreign currency translation adjustments 
   
970
   
44
 
Comprehensive income
 
$
31,331
 
$
21,866
 
 
Earnings per share:
             
Basic
 
$
.59
 
$
.48
 
Diluted
 
$
.58
 
$
.47
 
 
Weighted-average shares outstanding:
             
Basic
   
51,249
   
50,302
 
Diluted
   
52,106
   
51,315
 








 

URS CORPORATION AND SUBSIDIARIES
(In thousands)
 
 

   
Three Months Ended
 
   
March 30,
2007
 
March 31,
2006
 
Cash flows from operating activities:
             
Net income
 
$
30,361
 
$
24,188
 
Adjustments to reconcile net income to net cash from operating activities:
             
Depreciation and amortization
   
9,684
   
9,187
 
Amortization of debt issuance costs
   
429
   
461
 
Provision for doubtful accounts
   
530
   
4,013
 
Deferred income taxes
   
(249
)
 
(2,712
)
Stock-based compensation
   
6,636
   
3,777
 
Excess tax benefits from stock-based compensation
   
(1,500
)
 
(1,187
)
Minority interest in net income of consolidated subsidiaries
   
1,079
   
358
 
Changes in assets and liabilities:
             
Accounts receivable and costs and accrued earnings in excess of billings on contracts in process
   
434
   
(24,619
)
Prepaid expenses and other assets
   
(7,583
)
 
(5,829
)
Accounts payable, accrued salaries and wages and accrued expenses
   
(48,674
)
 
(64,770
)
Billings in excess of costs and accrued earnings on contracts in process
   
(42,162
)
 
3,927
 
Distributions from unconsolidated affiliates, net
   
5,024
   
15,503
 
Other long-term liabilities
   
(273
)
 
2,945
 
Other assets, net
   
(1,962
)
 
(4,781
)
Total adjustments and changes
   
(78,587
)
 
(63,727
)
Net cash from operating activities
   
(48,226
)
 
(39,539
)
 
Cash flows from investing activities:
             
Capital expenditures, less equipment purchased through capital leases
   
(4,771
)
 
(5,146
)
Net cash from investing activities
   
(4,771
)
 
(5,146
)
 
Cash flows from financing activities:
             
Long-term debt principal payments
   
(379
)
 
(11,744
)
Net borrowings (payments) under the lines of credit and short-term notes
   
(4,705
)
 
3,782
 
Net change in book overdrafts
   
27,802
   
(11
)
Capital lease obligation payments
   
(3,296
)
 
(3,058
)
Excess tax benefits from stock-based compensation
   
1,500
   
1,187
 
Proceeds from employee stock purchase plan and exercise of stock options
   
7,427
   
12,650
 
Net cash from financing activities
   
28,349
   
2,806
 
Net decrease in cash and cash equivalents
   
(24,648
)
 
(41,879
)
Cash and cash equivalents at beginning of period
   
89,502
   
101,545
 
Cash and cash equivalents at end of period
 
$
64,854
 
$
59,666
 
               
Supplemental information:
             
Interest paid
 
$
2,814
 
$
4,621
 
Taxes paid
 
$
26,378
 
$
6,129
 
Equipment acquired through capital leases
 
$
7,470
 
$
5,054
 

5


URS CORPORATION AND SUBSIDIARIES
REVENUES BY CLIENT TYPE - UNAUDITED
(In millions)


   
Three Months Ended
 
   
March 30, 2007
 
March 31, 2006
 
Federal Government Clients:
             
URS Division
 
$
118
 
$
124
 
EG&G Division
   
345
   
360
 
     
463
   
484
 
State and local government clients
   
254
   
212
 
Domestic private industry clients
   
304
   
208
 
International clients
   
115
   
94
 
                    Total revenues
 
$
1,136
 
$
998
 


 


6