EX-99.3 5 a83700exv99w3.htm EXHIBIT 99.3 exv99w3
 

Exhibit 99.3

(TKC LOGO)

NEWS RELEASE for August 7, 2002 at 7:30 AM EDT
Contact information:

     
The Keith Companies, Inc.
2955 Red Hill Ave.
Costa Mesa, CA 92626
(714) 668-7001
(714) 668-7026 Fax
www.keithco.com
Contact: Aram Keith,
CEO & Chairman of the Board
  Allen & Caron, Inc
Lynn Montoya (Investors), or
Lynn@allencaron.com
Matt Clawson
Matt@allencaron.com
(949) 474-4300

THE KEITH COMPANIES REPORTS RECORD SECOND QUARTER 2002 RESULTS
WITH NET REVENUE AND NET INCOME REACHING AN ALL-TIME HIGH

          36% increase in net revenue for the quarter ended June 30, 2002
 
          18% increase in net income for the quarter ended June 30, 2002

COSTA MESA, CA (August 7, 2002) ... The Keith Companies, Inc. (Nasdaq: TKCI), an engineering and consulting services firm, today announced that net revenue for the second quarter ended June 30, 2002 reached record levels, increasing to $24.1 million, up 36 percent from last year’s second quarter net revenue of $17.7 million.

     The overall increase in net revenue during the 2002 second quarter was due to additional net revenue generated from acquisitions. Net income for the second quarter of this year increased 18 percent to $1.9 million, or earnings per diluted share of $0.24 (based upon 7.9 million diluted weighted average shares outstanding), as compared to net income of $1.6 million, or earnings per diluted share of $0.23 (based upon 7.0 million diluted weighted average shares outstanding) during last year’s second quarter. The increase in diluted weighted average shares outstanding is predominately due to the Company’s Secondary Offering in May 2001.

     Chairman and CEO Aram Keith commented, “I am very pleased with our mix of business lines. Our diversification strategy, which our acquisition activity has noticeably enhanced, continues to be implemented. Each business line has had the opportunity to make noticeable contributions to our success.

     “Looking ahead, I am especially excited about the health of the real estate housing sector. As unprecedented demand continues to build in the U.S. and especially the Sunbelt, both for single family housing and for planned retirement communities, our real estate divisions continue to experience opportunities to enhance our operations in this sector with active developers and builders. Our strong presence in this market is what has set us apart from many of our competitors in the engineering services sector and has helped contribute to making our profit margin one of the highest in our industry,” Keith said.

     Net revenue for the six months ended June 30, 2002 was $45.5 million, an increase of 32 percent from $34.3 million for the six months ended June 30, 2001. This increase was due to additional net revenue generated from acquisitions. Net income for the six months ended June 30, 2002 increased 12 percent to $3.3 million, or earnings per diluted share of $0.42

 


 

THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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(based upon 7.8 million diluted weighted average shares outstanding) compared to $3.0 million or earnings per diluted share of $0.46 (based upon 6.4 million diluted weighted average shares outstanding) for the six months ended June 30, 2001. The increase in diluted weighted average shares outstanding is predominately due to the Company’s Secondary Offering in May 2001.

     Keith added, “Continued effort with our strategy of cross-selling has yielded benefits. The added awareness of our divisions about the expertise and services that other divisions provide has led to successfully winning larger portions of several contracts than would have been pursued prior to this strategy.”

     The Company’s June 30, 2002 balance sheet remains strong with cash and securities of $19.2 million, a current ratio of 2.95:1, a debt to equity ratio of 0.03:1 and shareholders’ equity of $57.2 million or $7.80 per share outstanding.

Net Revenue Contributions From Acquisitions

     Acquired companies (ALNM Group, Inc., acquired March 2002; Pacific Engineering Corporation, acquired September 2001; and Universal Energy, Inc., acquired November 2001) contributed $6.4 million in net revenue for the three months ended June 30, 2002 as compared to the corresponding prior year period.

     For the six months ended June 30, 2002, acquired companies contributed $11.6 million in net revenue compared to the six months ended June 30, 2001. This $11.6 million includes one month of revenue contributed by Hook & Associates Engineering, Inc. (acquired January 2001), four months of revenue contributed by ALNM Group, Inc., and a six-month revenue contribution from both Pacific Engineering Corporation and Universal Energy, Inc.

Financial Guidance

     The Keith Companies’ financial guidance for diluted earnings per share for the third and fourth quarters of 2002 remains unchanged from the guidance previously provided. The Company estimates net revenue for 2002 to range from $91.0 million to $96.0 million with estimated diluted earnings per share ranging from $0.90 to $0.97 ($0.25 to $0.29 for the third quarter and $0.22 to $0.26 for the fourth quarter) based upon an estimated 8.0 million weighted average number of diluted shares outstanding for the year.

Conference call to be broadcast live over the Internet

     The Company will be hosting an earnings conference call, which will be broadcast live over the Internet at 8:30 a.m. Pacific Time on August 7, 2002 and can be accessed by all interested parties at www.viavid.com. To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call for approximately seven days.

 


 

THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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About The Keith Companies

     The Keith Companies, Inc. is a fully integrated, multi-disciplined engineering and consulting services company, with offices located throughout the Western and Midwestern United States. The Keith Companies’ professionals provide a wide spectrum of skilled resources including land planning, engineering, surveying, mapping, environmental, and water and cultural resources, that are needed to effectively plan, engineer, and design state-of-the-art facilities. Additionally, the Company provides mechanical, electrical, chemical, power/energy engineering, and other industrial engineering services to design and improve the efficiency and reliability of automated and manufacturing processes, production lines, and fire protection systems. The Keith Companies benefits from a diverse public and private client base varying from residential and commercial real estate projects to institutional, manufacturing, and processing facilities. For more information visit the Company’s website at www.keithco.com.

     Certain statements in this news release may include forward-looking statements that express our expectation, prediction, belief, or projection. These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, and achievement of The Keith Companies to be materially and adversely different from any future results, performance, or achievement expressed or implied by these forward-looking statements. Factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the Company’s prospects in general include, but are not limited to: changes in the rate of economic growth in the United States and other major international economies, our ability to sustain our growth and profitability, our ability to implement our acquisition strategy and to successfully close and integrate acquired companies on a timely and cost-effective basis, our ability to successfully maintain our cross-selling strategy, outcomes of pending and future litigation, the ongoing financing of public works and infrastructure enhancements and refurbishment, our ability to attract and retain employees, the demand for electricity and the impact on power providers’ plans for expanding generation facilities, increasing competition by foreign and domestic companies, a downturn in the real estate market, our failure to accurately estimate costs on fixed-price contracts or contracts with not-to-exceed provisions, the uncertain timing of awards and contracts, the ability to maintain acquired companies’ profit margins and/or client base, the short- and long-term impact of terrorist activities and resulting political and military policies, and other factors as are described in the Company’s filings with the Securities and Exchange Commission.

TABLES FOLLOW

 


 

THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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The Keith Companies, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)

                                   
      Three Months Ended   Six Months Ended
      June 30,   June 30,
     
 
      2002   2001   2002   2001
     
 
 
 
Gross revenue
  $ 28,927,000     $ 19,239,000     $ 54,831,000     $ 37,941,000  
Subcontractor costs
    4,869,000       1,522,000       9,378,000       3,602,000  
 
   
     
     
     
 
 
Net revenue
    24,058,000       17,717,000       45,453,000       34,339,000  
Costs of revenue
    16,055,000       11,356,000       30,350,000       22,253,000  
 
   
     
     
     
 
 
Gross profit
    8,003,000       6,361,000       15,103,000       12,086,000  
Selling, general and administrative expenses
    4,969,000       3,777,000       9,774,000       7,061,000  
 
   
     
     
     
 
 
Income from operations
    3,034,000       2,584,000       5,329,000       5,025,000  
Interest income
    93,000       151,000       217,000       151,000  
Interest expense
    30,000       68,000       66,000       210,000  
Other expenses, net
    19,000       22,000       43,000       31,000  
 
   
     
     
     
 
 
Income before provision for income taxes
    3,078,000       2,645,000       5,437,000       4,935,000  
Provision for income taxes
    1,200,000       1,058,000       2,120,000       1,974,000  
 
   
     
     
     
 
 
Net income
  $ 1,878,000     $ 1,587,000     $ 3,317,000     $ 2,961,000  
 
   
     
     
     
 
Earnings per share data:
                               
 
Basic
  $ 0.26     $ 0.24     $ 0.45     $ 0.50  
 
   
     
     
     
 
 
Diluted
  $ 0.24     $ 0.23     $ 0.42     $ 0.46  
 
   
     
     
     
 
Weighted average number of shares outstanding:
                               
 
Basic
    7,323,154       6,520,611       7,317,007       5,885,776  
 
   
     
     
     
 
 
Diluted
    7,922,811       7,037,829       7,839,360       6,442,380  
 
   
     
     
     
 

 


 

THE KEITH COMPANIES REPORTS SECOND QUARTER RESULTS
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The Keith Companies, Inc. and Subsidiaries
Consolidated Balance Sheets

                         
            June 30,   December 31,
            2002   2001
           
 
            (Unaudited)        
Assets                
Current assets:
               
 
Cash and cash equivalents
  $ 10,149,000     $ 12,212,000  
 
Current portion of securities held-to-maturity
    6,983,000       11,521,000  
 
Contracts and trade receivables, net
    19,889,000       18,618,000  
 
Costs and estimated earnings in excess of billings
    12,069,000       8,270,000  
 
Prepaid expenses and other current assets
    1,423,000       1,458,000  
 
   
     
 
     
Total current assets
    50,513,000       52,079,000  
Securities held-to-maturity, less current portion
    2,053,000        
Equipment and leasehold improvements, net
    5,083,000       4,921,000  
Goodwill, net
    22,555,000       14,252,000  
Other assets
    298,000       240,000  
 
   
     
 
     
Total assets
  $ 80,502,000     $ 71,492,000  
 
   
     
 
Liabilities and Shareholders’ Equity                
Current liabilities:
               
 
Current portion of long-term debt and capital lease obligations
  $ 1,721,000     $ 459,000  
 
Trade accounts payable
    2,888,000       2,376,000  
 
Accrued employee compensation
    4,349,000       3,091,000  
 
Current portion of deferred tax liabilities
    3,676,000       2,028,000  
 
Other accrued liabilities
    2,727,000       2,961,000  
 
Billings in excess of costs and estimated earnings
    1,770,000       2,383,000  
 
   
     
 
     
Total current liabilities
    17,131,000       13,298,000  
Long-term debt and capital lease obligations, less current portion
    38,000       1,453,000  
Issuable common stock
    4,812,000       1,512,000  
Deferred tax liabilities
    1,092,000       1,271,000  
Accrued rent
    248,000       225,000  
 
   
     
 
     
Total liabilities
    23,321,000       17,759,000  
 
   
     
 
Shareholders’ equity:
               
 
Preferred stock
           
 
Common stock
    7,000       7,000  
 
Additional paid-in-capital
    42,227,000       42,096,000  
 
Retained earnings
    14,947,000       11,630,000  
 
   
     
 
   
Total shareholders’ equity
    57,181,000       53,733,000  
 
   
     
 
   
Total liabilities and shareholders’ equity
  $ 80,502,000     $ 71,492,000