-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BaJj5rrot/y31Dj0pG0e3WeGBNeQLhisiH2k0zyu60WP6H4+UKyhgiajq1UFbHXh xDSlFBAkPrYy1jQVlQMYBg== 0001011438-05-000043.txt : 20050210 0001011438-05-000043.hdr.sgml : 20050210 20050209195300 ACCESSION NUMBER: 0001011438-05-000043 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050209 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050210 DATE AS OF CHANGE: 20050209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEITH COMPANIES INC CENTRAL INDEX KEY: 0001080922 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 330203193 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26561 FILM NUMBER: 05590295 BUSINESS ADDRESS: STREET 1: 19 TECHNOLOGY DRIVE CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 949-923-6000 MAIL ADDRESS: STREET 1: 19 TECHNOLOGY DRIVE CITY: IRVINE STATE: CA ZIP: 92618 8-K 1 form_8-k.txt 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): FEBRUARY 10, 2005 THE KEITH COMPANIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 000-26561 33-0203193 (State or Other Jurisdiction of (Commission File Number) (IRS Employer Incorporation) Identification No.) 19 TECHNOLOGY DRIVE IRVINE, CALIFORNIA 92618 (Address of Principal Executive Offices, Including Zip Code) (949) 923-6001 (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or 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 14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Reference is made to the press release of The Keith Companies, Inc. issued on February 10, 2005, regarding 2004 Year End results, which is incorporated herein by reference. A copy of the press release is attached to this Form 8-K as Exhibit 99.1. ITEM 7.01 REGULATION FD DISCLOSURE. Reference is made to the press release of The Keith Companies, Inc. issued on February 10, 2005, regarding earnings guidance, which is incorporated herein by reference. A copy of the press release is attached to this Form 8-K as Exhibit 99.1. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. EXHIBIT NO. DESCRIPTION 99.1 Press release dated February 10, 2005, regarding 2004 Year End results and earnings guidance. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. February 9, 2005 THE KEITH COMPANIES, INC. By: /s/ Gary C. Campanaro ------------------------------------- Gary C. Campanaro Chief Financial Officer and Secretary EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 99.1 Press release dated February 10, 2005, regarding 2004 Year End results and earnings guidance. EX-99 2 exhibit_99-1.txt The Keith Companies/TKC PRESS RELEASE NEWS RELEASE FOR FEBRUARY 10, 2005 AT 7:30 AM EST Contact information: THE KEITH COMPANIES, INC. FINANCIAL RELATIONS BOARD 19 Technology Drive Tricia Ross Irvine, CA 92618 Investor Relations (949) 923-6001 (617) 520-7064 (949) 923-6026 Fax www.keithco.com Contact: Aram Keith, Chairman of the Board & CEO THE KEITH COMPANIES REPORTS RECORD RESULTS FOR FISCAL YEAR 2004 o Net Revenue Increased 6.6% in 2004 to $96.8 Million o Gross Margins Increased 190 Basis Points to 37.6% in 2004 o Income from Continuing Operations Increased 16.8% in 2004 to $8.4 Million o Diluted Earning Per Share from Continuing Operations increased 15.4% to $1.05 o Raised 2005 Guidance for Diluted Earnings Per Share from Continuing Operations o Balance Sheet Remains Strong with $42.1 Million in Cash and Securities and No Debt IRVINE, CA (February 10, 2005) - The Keith Companies, Inc. (Nasdaq: TKCI), an engineering and consulting services firm, today announced financial results for the fourth quarter and year ended December 31, 2004, which included record annual net revenue and income from continuing operations. FOURTH QUARTER AND YEAR END 2004 RESULTS Net revenue for the three months ended December 31, 2004 increased 6.6% to $24.3 million, while income from continuing operations for the same period increased 20.7% to $2.3 million and resulted in diluted earnings per share from continuing operations of $0.28. This compares to net revenue for the fourth quarter of 2003 of $22.8 million, with income from continuing operations of $1.9 million and diluted earnings per share from continuing operations of $0.24. Our strong fourth quarter results were positively impacted by $210,000, net of income taxes, related to a business development agreement in our energy/industrial segment entered into in early 2004 and terminated at year end. Net revenue for the twelve months ended December 31, 2004 increased 6.6% to a record $96.8 million, while income from continuing operations for the same period increased 16.8% to a record $8.4 million and resulted in diluted earnings per share from continuing operations of $1.05. This compares to net revenue for the twelve months of 2003 of $90.7 million, with income from continuing operations of $7.2 million and diluted earnings per share from continuing operations of $0.91. THE KEITH COMPANIES REPORTS RECORD RESULTS FOR FISCAL YEAR 2004 Page 2 of 7 Mainly due to stronger collections of accounts receivables, net cash from operating activities for the year ended December 31, 2004 increased 113% to $15.6 million, compared to $7.4 million during 2003. "Our real estate development segment continued to drive strong net revenue gains in the fourth quarter," said Aram Keith, Chairman and CEO of The Keith Companies. "This segment achieved 8.9% year-over-year net revenue growth for the fourth quarter of 2004, and 14.9% net revenue growth for the year. We exited the year with a strong pipeline of projects in our real estate development segment. We believe that the real estate market will continue to grow in 2005. In addition, we are encouraged by the continued improvement in the operating income of our public works/infrastructure segment, and continue to pursue a variety of opportunities in this area. Infrastructure concerns are one of the biggest issues facing state, county and local governments and we believe that we are well positioned to capitalize on infrastructure improvement projects that receive funding. Year-over-year, our energy/industrial segment showed an improvement in income from operations in the fourth quarter, and as we stated previously, we expect this segment to continue to improve partially due to legislation extending production tax credits for power generating projects that use renewable energy sources. We continue to see improved proposal activity in this segment." "Gross margins increased in all three of our business segments in 2004, primarily as a result of improved employee utilization rate and higher fees. This represents our second consecutive year of improved Company wide gross margins, with this latest year improving by 190 basis points to 37.6%," continued Keith. FINANCIAL POSITION The Company's balance sheet at December 31, 2004 remained strong with cash and securities of $42.1 million, no debt, a current ratio of 4.8:1, and shareholders' equity of $81.9 million, or $10.34 per common share outstanding at December 31, 2004. DISCONTINUED OPERATIONS During 2004, the Company made an investment in a private entity in the energy sector and, in return, received a controlling interest in that entity. As a result of the Company's controlling interest, the Company had consolidated the entity's operating results with that of the Company. In December 2004, the Company made a decision to shut down the operations of this entity primarily due to lower than expected operating performance. In accordance with Generally Accepted Accounting Principles, the Company has changed the presentation of its "Consolidated Statements of Income" to reflect as discontinued operations the results of this entity for 2004. The total loss, including the impairment charge associated with this entity, net of income taxes, totaled $273,000 and $430,000 for the quarter and year ended December 31, 2004, respectively. 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 THE KEITH COMPANIES REPORTS RECORD RESULTS FOR FISCAL YEAR 2004 Page 3 of 7 guidance amounts are before special items, if any, and exclude the impact of any potential future acquisitions. The Company is increasing its financial guidance for diluted earnings per share for 2005. The Company estimates its full year 2005 net revenue may range from $106.5 million to $111.5 million with estimated diluted earnings per share from continuing operations ranging from $1.09 to $1.25 ($0.21 to $0.24 for the first quarter; $0.28 to $0.32 for the second quarter; $0.33 to $0.38 for the third quarter; and $0.27 to $0.31 for the fourth quarter) based upon an estimated 8.1 million weighted average number of diluted shares outstanding for the year. The previous annual 2005 guidance for diluted earnings per share from continuing operations ranged from $1.04 to $1.22. Consistent with the Company's past accounting treatment of stock options, the 2005 diluted earnings per share amounts exclude the effect of expensing stock options. New accounting pronouncements, however, will require the expensing of stock options effective for the first interim period beginning after June 15, 2005. The Company has not completed its analysis as to the effect the new pronouncement may have on its overall 2005 financial results. Commenting on the Company's financial guidance, Keith said, "Our revised upward guidance for 2005 primarily reflects the on-going strength of our real estate development segment, as well as expected improvement of our energy/industrial segment and a lower estimated effective corporate income tax rate of 38%. The recently opened San Diego and Bakersfield offices are fully operational and we expect them to be contributors to the Company's performance over the course of this year. Our robust financial position enables us to explore various acquisition opportunities, in addition to new office openings, that will deliver strong operational performance, as well as solid returns for our shareholders." CONFERENCE CALL WEBCAST 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 February 10, 2005 and can be accessed by all interested parties at www.keithco.com or www.viavid.net. 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, an online archive will be available shortly after the call. A telephone replay will be available through February 17, 2005 by dialing (800) 405-2236 and entering passcode 11022515. A copy of this press release and a link to the Company's quarterly conference call will be available at the Company's website under the headings "TKC News" and "Investor Relations," respectively, at www.keithco.com. 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, THE KEITH COMPANIES REPORTS RECORD RESULTS FOR FISCAL YEAR 2004 Page 4 of 7 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, a downturn in the real estate market, the ongoing financing of public works and infrastructure enhancements and refurbishments, the demand for electricity and the impact on power providers' plans for expanding generation facilities, our failure to accurately estimate costs on fixed-price contracts or contracts with not-to-exceed provisions, changes in the carrying value of our goodwill and other long-term assets, our ability to implement our acquisition strategy and to successfully close and integrate acquired companies on a timely and cost-effective basis while maintaining their profit margins and/or client base, our ability to attract and retain employees, the uncertain timing of awards and contracts, outcomes of pending and future litigation, increasing competition by domestic and foreign companies, 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 THE KEITH COMPANIES REPORTS RECORD RESULTS FOR FISCAL YEAR 2004 Page 5 of 7
THE KEITH COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, --------------------------- --------------------------- 2004 2003 2004 2003 --------------------------- --------------------------- Gross revenue $26,471,000 $25,031,000 $105,346,000 $99,950,000 Subcontractor costs 2,209,000 2,264,000 8,592,000 9,206,000 ------------ ------------ ------------- ------------ Net revenue 24,262,000 22,767,000 96,754,000 90,744,000 Costs of revenue 15,162,000 14,410,000 60,363,000 58,359,000 ------------ ------------ ------------- ------------ Gross profit 9,100,000 8,357,000 36,391,000 32,385,000 Selling, general and administrative expenses 5,516,000 5,398,000 23,013,000 21,070,000 ------------ ------------ ------------- ------------ Income from operations 3,584,000 2,959,000 13,378,000 11,315,000 Interest income, net 208,000 69,000 481,000 264,000 Other income, net 23,000 71,000 46,000 259,000 ------------ ------------ ------------- ------------ Income before provision for income taxes and discontinued operations 3,815,000 3,099,000 13,905,000 11,838,000 Provision for income taxes 1,532,000 1,208,000 5,468,000 4,617,000 ------------ ------------ ------------- ------------ Income from continuing operations 2,283,000 1,891,000 8,437,000 7,221,000 Loss from discontinued operations, net of income taxes 273,000 -- 430,000 -- ------------ ------------ ------------- ------------ Net income $2,010,000 $ 1,891,000 $ 8,007,000 $ 7,221,000 ============ ============ ============= ============ Earnings per share from continuing operations: Basic $ 0.29 $ 0.25 $ 1.08 $ 0.95 ============ ============ ============= ============ Diluted $ 0.28 $ 0.24 $ 1.05 $ 0.91 ============ ============ ============= ============ Earnings (loss) per share from discontinued operations, net of income taxes: Basic $ (0.03) $ 0.00 $ (0.05) $ 0.00 ============ ============ ============= ============ Diluted $ (0.03) $ 0.00 $ (0.05) $ 0.00 ============ ============ ============= ============ Earnings per share: Basic $ 0.26 $ 0.25 $ 1.03 $ 0.95 ============ ============ ============= ============ Diluted $ 0.25 $ 0.24 $ 1.00 $ 0.91 ============ ============ ============= ============ Weighted average number of shares outstanding: Basic 7,823,874 7,637,880 7,778,661 7,615,264 ============ ============ ============= ============ Diluted 8,093,006 7,963,622 8,039,457 7,957,344 ============ ============ ============= ============
THE KEITH COMPANIES REPORTS RECORD RESULTS FOR FISCAL YEAR 2004 Page 6 of 7
THE KEITH COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS DECEMBER 31, DECEMBER 31, 2004 2003 ----------------- ----------------- ASSETS Current assets: Cash and cash equivalents $ 38,844,000 $ 24,277,000 Securities held-to-maturity 3,300,000 4,600,000 Contracts and trade receivables, net 16,452,000 19,844,000 Costs and estimated earnings in excess of billings 10,470,000 9,997,000 Prepaid expenses and other current assets 928,000 1,468,000 ----------------- ----------------- Total current assets 69,994,000 60,186,000 Equipment and leasehold improvements, net 4,643,000 4,067,000 Goodwill, net 23,059,000 23,059,000 Other assets 273,000 224,000 ----------------- ----------------- Total assets $ 97,969,000 $ 87,536,000 ================= ================= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 1,685,000 $ 1,640,000 Accrued employee compensation 5,445,000 4,037,000 Current portion of deferred tax liabilities 1,661,000 2,444,000 Other accrued liabilities 3,809,000 3,078,000 Billings in excess of costs and estimated earnings 1,922,000 1,571,000 ----------------- ----------------- Total current liabilities 14,522,000 12,770,000 Issuable common stock -- 792,000 Deferred tax liabilities 1,125,000 1,560,000 Accrued rent 401,000 452,000 ----------------- ----------------- Total liabilities 16,048,000 15,574,000 ----------------- ----------------- Shareholders' equity: Preferred stock -- -- Common stock 8,000 8,000 Additional paid-in-capital 48,114,000 45,464,000 Deferred stock compensation (867,000) (169,000) Retained earnings 34,666,000 26,659,000 ----------------- ----------------- Total shareholders' equity 81,921,000 71,962,000 ----------------- ----------------- Total liabilities and shareholders' equity $ 97,969,000 87,536,000 ================= =================
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THE KEITH COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWELVE MONTHS ENDED DECEMBER 31, ------------------------------------- 2004 2003 ----------------- ----------------- Cash flows from operating activities: Net income $ 8,007,000 $ 7,221,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,978,000 2,231,000 Loss on impairment/sale of equipment 413,000 29,000 Reduction in purchase price of acquired companies -- (137,000) Tax benefit from stock options 299,000 69,000 Deferred stock compensation expense 292,000 37,000 Changes in operating assets and liabilities: Contracts and trade receivables, net 3,441,000 (1,269,000) Costs and estimated earnings in excess of billings (473,000) 304,000 Prepaid expenses and other assets 475,000 (53,000) Trade accounts payable and accrued liabilities 2,074,000 (652,000) Billings in excess of costs and estimated earnings 351,000 298,000 Deferred tax liabilities (1,218,000) (728,000) ----------------- ----------------- Net cash provided by operating activities 15,639,000 7,350,000 ----------------- ----------------- Cash flows from investing activities: Net cash expended for acquisitions -- (722,000) Additions to equipment and leasehold improvements (3,017,000) (1,548,000) Proceeds from (purchases of) securities held-to-maturity 1,300,000 (1,436,000) Proceeds from sales of equipment 50,000 57,000 ----------------- ----------------- Net cash used in investing activities (1,667,000) (3,649,000) ----------------- ----------------- Cash flow from financing activities: Principal payments on capital lease obligations -- (52,000) Net proceeds from stock options and restricted shares 595,000 295,000 ----------------- ----------------- Net cash provided by financing activities 595,000 243,000 ----------------- ----------------- Net increase in cash and cash equivalents 14,567,000 3,944,000 Cash and cash equivalents, beginning of period 24,277,000 20,333,000 ----------------- ----------------- Cash and cash equivalents, end of period $ 38,844,000 $ 24,277,000 ================= ================= ####
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