EX-99 3 exhibit_99-1.txt EXHIBIT 99.1 THE KEITH COMPANIES|TKC NEWS RELEASE FOR MAY 8, 2003 AT 7:30 AM EST ------------------------------------------- Contact information: THE KEITH COMPANIES, INC. FRB | WEBER SHANDWICK 19 Technology Drive Tricia Ross Irvine, CA 92618 Investor Relations (949) 923-6001 (310) 407-6540 (949) 923-6026 Fax WWW.KEITHCO.COM --------------- Contact: Aram Keith, CEO & Chairman of the Board THE KEITH COMPANIES REPORTS RESULTS FOR QUARTER ENDED MARCH 31, 2003 IRVINE, CA (May 8, 2003) ... The Keith Companies, Inc. (Nasdaq: TKCI), an engineering and consulting services firm, today announced financial results for the quarter ended March 31, 2003. Net revenue for the three months ended March 31, 2003 increased 7% to $22.3 million, while income from continuing operations for the same period decreased to $1.4 million and resulted in diluted earnings per share from continuing operations of $0.18. This compares to net revenue for the first quarter of 2002 of $20.8 million with income from continuing operations of $1.5 million and diluted earnings per share from continuing operations of $0.20. Excluding the net revenue of ALNM Group, Inc. for January and February of 2003 (the Company acquired ALNM Group, Inc. effective March 1, 2002), the Company experienced internal net revenue growth of 0.8% for the first quarter of 2003 over the first quarter of 2002. "Demand in the real estate industry for our services remained very strong as we posted a 15.5 % internal growth rate in net revenue in the first quarter of 2003 versus 2002," said Aram Keith, Chairman and CEO of The Keith Companies, Inc. "The stability we feel in this area is reinforced by the level of new contract activity that is occurring. During February and March of 2003, our Riverside County, California offices alone entered into contracts valued at over $3.5 million for new master planned community work. Likewise, several of our other real estate services-related offices, mainly in California, continue to see robust demand. This growth in net revenue, however, was offset by weakness in our industrial/energy segment, as many of these clients have deferred capital spending plans until industry conditions improve. We have scaled back our resources in this area to a level commensurate with the demand we are now seeing." Page 1 of 6 FINANCIAL POSITION The Company's March 31, 2003 balance sheet remains strong with cash and securities of $24.2 million, a current ratio of 4.19:1, a debt to equity ratio of 0.00:1 and shareholders' equity of $65.0 million or $8.65 per common share outstanding at March 31, 2003. FINANCIAL GUIDANCE In adherence with the U.S. Securities and Exchange Commission's (SEC) Regulation Fair Disclosure, The Keith Companies provides the following guidance for all investors and encourages all current and potential investors to review the Disclosure Regarding Forward-Looking Statements in this press release as well as all financial documents filed with the SEC. All guidance amounts are before special items, if any, and exclude the impact of any potential future acquisitions. The Company is revising its financial guidance for 2003. For the full year, the Company now estimates net revenue to range from $93.0 million to $100.0 million, and forecasts diluted earnings per share to range from $0.85 to $1.00 based upon an estimated 8.0 million weighted average number of diluted shares outstanding. Broken out by quarters, the Company expects the following ranges for diluted earnings per share: $0.19 to $0.24 for the second quarter; $0.27 to $0.32 for the third quarter; and $0.21 to $0.26 for the fourth quarter. "We anticipate that the weakness in our industrial/energy segment will continue at least through the remainder of the year," said Keith. "In terms of growth from first quarter 2002 to first quarter 2003, net revenue from our real estate services exceeded our expectations. It continues to be a source of strength and stability for the Company. Our major residential real estate clients continue to acquire new land for development, which is providing a growing pipeline of work in this area. "Our balance sheet remains exceptionally strong, with more than $24 million in cash and securities and virtually no debt. This gives us the financial flexibility to continue implementing our acquisition strategy. We will continue to remain extremely thorough in our due diligence and will move on acquisition opportunities when we are confident that they should generate profitable long-term growth for our shareholders," said Keith. 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 May 8, 2003 and can be accessed by all interested parties at HTTP://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. A copy of the Company's press release announcing its earnings and any other financial and statistical information about the period to be presented in the conference call will be available at this section of the Company's website entitled "Investor Relations" at WWW.KEITHCO.COM. Page 2 of 6 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 studies, and water and cultural resources that are needed to effectively plan, engineer, and design state-of-the-art private and public 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 economic growth in the United States (especially in California) and other major international economies (especially Brazil), 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, changes in the carrying value of our goodwill and other long-term assets, 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, 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, risks inherent in doing business outside the United States, including the difficulty of enforcing contracts, political instability and foreign currency fluctuations and potential exchange restrictions, 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. The forward-looking information set forth in this press release is as of the date indicated above and we undertake no duty to update this information. TABLES FOLLOW Page 3 of 6
THE KEITH COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED MARCH 31, ------------------------------- 2003 2002 ------------- -------------- (UNAUDITED) Gross revenue $ 24,651,000 $ 25,267,000 Subcontractor costs 2,305,000 4,464,000 ------------- -------------- Net revenue 22,346,000 20,803,000 Costs of revenue 14,942,000 13,692,000 ------------- -------------- Gross profit 7,404,000 7,111,000 Selling, general and administrative expenses 5,387,000 4,646,000 ------------- -------------- Income from operations 2,017,000 2,465,000 Interest income 69,000 124,000 Interest expense 6,000 36,000 Other (income) expenses, net (212,000) 20,000 ------------- -------------- Income before provision for income taxes and discountinued operations 2,292,000 2,533,000 Provision for income taxes 894,000 989,000 ------------- -------------- Income from continuing operations 1,398,000 1,544,000 Loss from discontinued operations, net of income taxes -- 105,000 ------------- -------------- Net income $ 1,398,000 $ 1,439,000 ============= ============== Earnings per share from continuing operations: Basic $ 0.18 $ 0.21 ============= ============== Diluted $ 0.18 $ 0.20 ============= ============== Earnings (loss) per share from discontinued operations, net of income taxes: Basic $ -- $ (0.01) ============= ============== Diluted $ -- $ (0.01) ============= ============== Earnings per share: Basic $ 0.18 $ 0.20 ============= ============== Diluted $ 0.18 $ 0.19 ============= ============== Weighted average number of shares outstanding: Basic 7,588,601 7,310,790 ============= ============== Diluted 7,948,933 7,755,839 ============= ==============
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, DECEMBER 31, 2003 2002 -------------- ------------- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 17,763,000 $ 20,333,000 Securities held-to-maturity 6,456,000 3,164,000 Contracts and trade receivables, net 16,295,000 18,771,000 Costs and estimated earnings in excess of billings 11,405,000 10,392,000 Prepaid expenses and other current assets 2,347,000 1,367,000 -------------- -------------- Total current assets 54,266,000 54,027,000 Equipment and leasehold improvements, net 4,690,000 4,831,000 Goodwill, net 23,141,000 23,056,000 Other assets 216,000 312,000 -------------- -------------- Total assets $ 82,313,000 $ 82,226,000 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of capital lease obligations $ 9,000 $ 52,000 Trade accounts payable 1,526,000 1,818,000 Accrued employee compensation 3,918,000 3,722,000 Current portion of deferred tax liabilities 3,065,000 3,065,000 Other accrued liabilities 3,282,000 4,484,000 Billings in excess of costs and estimated earnings 1,157,000 1,273,000 -------------- -------------- Total current liabilities 12,957,000 14,414,000 Capital lease obligations, less current portion 8,000 18,000 Issuable common stock 2,215,000 2,215,000 Deferred tax liabilities 1,675,000 1,675,000 Accrued rent 421,000 292,000 -------------- -------------- Total liabilities 17,276,000 18,614,000 -------------- -------------- Shareholders' equity: Preferred stock -- -- Common stock 8,000 8,000 Additional paid-in-capital 44,193,000 44,166,000 Retained earnings 20,836,000 19,438,000 -------------- -------------- Total shareholders' equity 65,037,000 63,612,000 -------------- -------------- Total liabilities and shareholders' equity $ 82,313,000 $ 82,226,000 ============== ==============
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THE KEITH COMPANIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, -------------------------------- 2003 2002 --------------- -------------- (UNAUDITED) Cash flows from operating activities: Net income $ 1,398,000 $ 1,439,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 593,000 539,000 Loss on sale of equipment 16,000 10,000 Changes in operating assets and liabilities, net of effects from acquisitions: Contracts and trade receivables, net 2,476,000 3,725,000 Costs and estimated earnings in excess of billings (1,060,000) (1,389,000) Prepaid expenses and other assets (926,000) (263,000) Trade accounts payable and accrued liabilities (1,166,000) 496,000 Billings in excess of costs and estimated earnings (116,000) (176,000) -------------- -------------- Net cash provided by operating activities $ 1,215,000 $ 4,381,000 -------------- -------------- Cash flows from investing activities: Net cash expended for acquisition -- (7,297,000) Additions to equipment and leasehold improvements (498,000) (349,000) Proceeds from (purchase of) securities held-to-maturity (3,292,000) 3,289,000 Proceeds from sales of equipment 31,000 61,000 -------------- -------------- Net cash used in investing activities $ (3,759,000) $ (4,296,000) -------------- -------------- Cash flow from financing activities: Principal payments on long-term debt and capital lease obligations, including current portion (53,000) (137,000) Proceeds from exercise of stock options 27,000 12,000 -------------- -------------- Net cash used in financing activities $ (26,000) $ (125,000) -------------- -------------- Net decrease in cash and cash equivalents (2,570,000) (40,000) Cash and cash equivalents, beginning of period $ 20,333,000 $ 12,212,000 -------------- -------------- Cash and cash equivalents, end of period $ 17,763,000 $ 12,172,000 ============== ==============
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