EX-99.1 2 d72717_ex99-1.txt PRESS RELEASE DATED SEPTEMBER 13, 2007 EXHIBIT 99.1 National Technical Systems Announces Fiscal 2008 Second Quarter, Six Months Results Wednesday September 12, 7:30 am ET CALABASAS, Calif.--(BUSINESS WIRE)--National Technical Systems, Inc. (NASDAQ:NTSC - News; NTS), a leading provider of engineering and evaluation services, announced today results for its fiscal 2008 second quarter and six months ended July 31, 2007. Net income for the fiscal 2008 second quarter increased 212% to $770,000 as compared to $247,000 for the same period in the prior year with corresponding diluted earnings per share of $0.08 in the current period compared to $0.03 for the same quarter in the prior year. Net income for the six months ended July 31, 2007 increased 127% to $1,361,000 as compared to $599,000 for the same period in the prior year with corresponding diluted earnings per share of $0.15 in the current period compared to $0.06 for the same period in the prior year. Total revenues for the fiscal 2008 second quarter increased 9.1% to $31.0 million, compared to $28.4 million for the same period in the prior year. Total revenues for the six months ended July 31, 2007 increased 7.5% to $60.8 million, compared to $56.6 million for the same period in the prior year. Gross profit increased 23.6% to $8,129,000 in the current quarter, compared to $6,579,000 for the same period in the prior year. Gross profit for the six months ended July 31, 2007 increased 18.2% to $15,144,000, compared to $12,817,000 for the same period in the prior year. "Results this quarter exceeded our expectations in the Engineering and Evaluation segment," said CEO William C. McGinnis. "An expanding aerospace market and a healthy defense market fueled the revenue growth in this segment. These markets generate higher margins and have positively impacted our bottom line. In addition, the Company's investments in advanced technology capabilities, combined with continued focus on customer support are keys to organic growth and customer retention." McGinnis added: "We are committed to our continuous growth initiative through a sound acquisition strategy and increased sales efforts. We have strengthened management in the professional services business focusing on engineering development and technical solutions. We believe that there are some synergies with our Engineering and Evaluation segment that will help us capitalize upon our capabilities in the Technical Solutions segment." Revenues from Engineering & Evaluation for the fiscal 2008 second quarter increased 18.6% to $22.8 million, compared to $19.2 million for the same period in the prior year. For the six months ended July 31, 2007, revenues increased 15.3% to $44.2 million, compared to $38.4 million for the same period in the prior year. The year-over-year increase in revenues was primarily due to strong revenues in the defense and aerospace markets. Operating income in the Engineering & Evaluation segment increased 136.2% to $1,828,000 in the current quarter, compared to $774,000 for the same period in the prior year. For the six months ended July 31, 2007, operating income increased 74.6% to $2,995,000, compared to $1,715,000 for the same period in the prior year. Revenues from Technical Solutions for the fiscal 2008 second quarter were $8.2 million, compared to $9.2 million for the year-earlier period. For the six months ended July 31, 2007, revenues decreased 8.9% to $16.6 million, compared to $18.2 million for the same period in the prior year. Operating income in the Technical Solutions segment was $16,000 in the current quarter, compared to $118,000 for the year-earlier period. For the six months ended July 31, 2007, operating income increased to $138,000 from $80,000 for the same period in the prior year. -4- Conference Call NTS is conducting a conference call to review the financial results today at 10:00 AM Pacific Time (11:00 AM Mountain Time, 12:00 PM Central Time, 1:00 PM Eastern Time). The dial-in number for the call is 1-800-219-6110. A live web cast of the call can be accessed at www.ntscorp.com (Investors page). About National Technical Systems, Inc. National Technical Systems, Inc. is a leading provider of engineering and evaluation services to the defense, aerospace, telecommunications, automotive and high technology markets. Through a world-wide network of resources, NTS provides full product life-cycle support, offering world class design engineering, compliance, testing, certification, quality registration and program management. For additional information about NTS, visit our website at www.ntscorp.com or call 800-270-2516. Cautionary Note Regarding Forward-Looking Statements: The statements in this press release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties pertaining to customer orders, demand for services and products, development of markets for the company's services and products and other risks identified in the company's SEC filings, and in particular its Annual Report on Form 10-K. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Income
Three Months Ended Six Months Ended July 31, July 31, 2007 2006 2007 2006 -------------------------------------------------------------- Net revenues $31,025,000 $28,438,000 $60,829,000 $56,589,000 Cost of sales 22,896,000 21,859,000 45,685,000 43,772,000 -------------------------------------------------------------- Gross profit 8,129,000 6,579,000 15,144,000 12,817,000 Selling, general and administrative expense 6,300,000 5,747,000 12,082,000 11,157,000 Equity income from non-consolidated subsidiary (15,000) (60,000) (71,000) (135,000) -------------------------------------------------------------- Operating income 1,844,000 892,000 3,133,000 1,795,000 Other income (expense): Interest expense, net (478,000) (451,000) (932,000) (812,000) Other income
-5- (expense), net (29,000) 123,000 127,000 129,000 -------------------------------------------------------------- Total other expense, net (507,000) (328,000) (805,000) (683,000) Income before income taxes and minority interest 1,337,000 564,000 2,328,000 1,112,000 Income taxes 549,000 270,000 942,000 474,000 -------------------------------------------------------------- Income before minority interest 788,000 294,000 1,386,000 638,000 Minority interest (18,000) (47,000) (25,000) (39,000) -------------------------------------------------------------- Net income $ 770,000 $ 247,000 $ 1,361,000 $ 599,000 =========== =========== =========== =========== Net income per common share: Basic $ 0.09 $ 0.03 $ 0.16 $ 0.07 ============================================================== Diluted $ 0.08 $ 0.03 $ 0.15 $ 0.06 ============================================================== Weighted average common shares outstanding 8,779,000 8,544,000 8,761,000 8,718,000 Dilutive effect of stock options 664,000 899,000 620,000 799,000 -------------------------------------------------------------- Weighted average common shares outstanding, assuming dilution 9,443,000 9,443,000 9,381,000 9,517,000 ==============================================================
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