EX-99.1 2 e18675ex99-1.txt PRESS RELEASE Exhibit 99.1 Baker Reports Revenue and EPS Gains for 2004 Second Quarter PITTSBURGH, Aug. 2 /PRNewswire-FirstCall/ -- Michael Baker Corporation (Amex: BKR) today reported a 25 percent increase in total contract revenues and a significant increase in earnings per share for both the second quarter and first six months of 2004 compared to the same periods in 2003. For the quarter, Baker posted net income of $3.6 million, or $0.42 per diluted share, on total contract revenues of $131 million. This compares with net income of $68,000, or $0.01 per diluted share, on total contract revenues of $105 million in second-quarter 2003. The current quarter benefited from a particularly strong revenue and operating performance in the Engineering segment, favorable insurance loss reserves and other adjustments. The 2003 second quarter was adversely impacted by the impairment of an investment in a startup Energy company, a number of operating and other factors, including project mix in the Energy segment and lower than anticipated volume and labor utilization rates in the Engineering segment, and costs associated with the company's new information systems. Revenues in the Engineering business increased 32 percent from the year- ago quarter, while operating income, before corporate overhead allocations, increased 119 percent over the same period. The major factor in the operating income before corporate overhead improvement was a significant increase in labor utilization rates during the quarter compared to second-quarter 2003, the result of the substantial backlog of work the segment had to begin 2004, including the up to $750 million Program Management contract with the Federal Emergency Management Agency (FEMA). Operating income before corporate overhead expressed as a percentage of Engineering segment contract revenues was 9.6 percent for second-quarter 2004, compared to 5.7 percent in second- quarter 2003. Revenues in the Energy business increased 15 percent from the second quarter of 2003, while operating income, before corporate overhead allocations, declined (6.5%) due to increases in accruals to fund the company's short-term and recently enacted long-term incentive compensation programs at maximum levels. Operating income before corporate overhead expressed as a percentage of Energy segment contract revenues was 4.3 percent for the current quarter 2004, compared to 5.3 percent in the year-ago period. Net interest expense was $24,000 for the current quarter, compared to net interest expense of $216,000 for the prior period. At June 30, 2004, the company had borrowings of $1.1 million, a reduction of approximately $2.8 million from borrowing levels at March 31, 2004. Total backlog for the company was $1.48 billion at June 30, 2004, compared to $721 million at year-end 2003. For the first six months of 2004, the company recorded net income of $6.7 million, or $0.79 per diluted common share, on total contract revenues of $256 million, as compared to a net loss of $29,000, or $0.00 per diluted share, on total contract revenues of $204 million in the first six months of 2003. Commenting on the results, President and Chief Executive Officer Donald P. Fusilli, Jr., said, "We are pleased with our second quarter and first half results, as they reflect the progress Baker has achieved in both business segments. Our investments to expand in the Federal sector in Engineering and emphasize Managed Services onshore in Energy are showing positive returns. This broad base of business has allowed us to take advantage of numerous and varied opportunities both nationally as well as internationally." He added that discounting one-time adjustments for insurance loss reserves and other items, the company's second quarter results are in line with its guidance. "We are reviewing our operations plan for the second half of the year and, if necessary, will provide revised 2004 revenue and earnings guidance at a later date." Michael Baker Corporation has scheduled a conference call and webcast for Tuesday, August 3 at 9:00 AM Eastern Daylight Time to discuss the quarterly results. Please call 800-860-2442 at least 10 minutes prior to the start of the call. To access the webcast, please visit the investor relations portion of Baker's website at http://www.mbakercorp.com . Michael Baker Corporation provides engineering and energy expertise for public and private sector clients worldwide. The firm's primary services include engineering design for the transportation and civil infrastructure markets, operation and maintenance of oil and gas production facilities, architecture, environmental services, and construction management for building and transportation projects. Baker has more than 4,500 employees in over 40 offices across the United States and internationally. (The above information includes certain forward-looking statements concerning future operations and performance of the Company. Forward looking statements are subject to market, operating and economic risks and uncertainties that may cause the Company's actual results in future periods to be materially different from the performance suggested above. Factors that may cause such differences include, among others: increased competition; increased costs; changes in general market conditions; changes in industry trends; changes in the regulatory environment; changes in anticipated levels of government spending on infrastructure; and changes in loan relationships or sources of financing. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.) FINANCIAL SUMMARY (Unaudited) Operating Results For the quarter ended June 30 ================= ============================= (In thousands, except earnings per share) 2004 2003 ==== ==== Total contract revenues $130,603 $104,799 Gross profit $23,990 $15,019 Income from operations $6,134 $1,150 Income before taxes $6,342 $122 Net income $3,605 $68 Weighted average shares outstanding: Basic 8,402 8,312 Diluted 8,518 8,361 Net income per share: Basic $0.43 $0.01 Diluted $0.42 $0.01 ======================================================================= Operating Results For the six months ended June 30 ================= ================================ (In thousands, except earnings per share) 2004 2003 ==== ==== Total contract revenues $255,607 $204,098 Gross profit $44,931 $28,465 Income from operations $11,519 $1,039 Income/(loss) before taxes $12,187 $(57) Net income/(loss) $6,703 $(29) Weighted average shares outstanding: Basic 8,361 8,329 Diluted 8,471 8,377 Net income per share: Basic $0.80 $- Diluted $0.79 $- ======================================================================= For the three For the six Segment results months ended months ended =============== =============== ================ (In millions) 6/30/04 6/30/03 6/30/04 6/30/03 ======= ======= ======= ======= Engineering =========== Revenues $81.1 $61.6 $156.0 $120.3 Income from operations before Corporate overhead 7.8 3.5 14.9 6.4 Less: Corporate overhead (2.8) (3.0) (5.5) (6.0) ======================================================================= Income/(loss) from operations 5.0 0.5 9.4 0.4 ======================================================================= Energy ====== Revenues 49.5 43.2 99.6 83.8 Income from operations before Corporate overhead 2.1 2.3 4.6 3.5 Less: Corporate overhead (1.2) (1.0) (2.4) (2.1) ======================================================================= Income from operations 0.9 1.3 2.2 1.4 ======================================================================= Non-Core ======== Revenues - - - - Income from operations before Corporate overhead - (0.1) 0.2 0.2 Less: Corporate overhead - - - - ======================================================================= Income from operations - (0.1) 0.2 0.2 ======================================================================= Total Reportable Segments ========================= Revenues 130.6 104.8 255.6 204.1 Income from operations before Corporate overhead 9.9 5.7 19.7 10.1 Less: Corporate overhead (4.0) (4.0) (7.9) (8.1) ======================================================================= Income from operations 5.9 1.7 11.8 2.0 ======================================================================= Other Corporate/Insurance income/(expense) 0.2 (0.5) (0.3) (1.0) ======================================================================= Total Company - Income/(loss) from operations $6.1 $1.2 $11.5 $1.0 ======================================================================= Backlog ======== (In thousands) At 6/30/04 At 12/31/03 ========== =========== Total $1,477,400 $720,700 Condensed Balance Sheet ======================= (In thousands) At 6/30/04 At 12/31/03 ========== =========== ASSETS Cash and cash equivalents $11,039 $9,274 Receivables, net 82,666 74,940 Costs in excess of billings 49,053 51,620 Prepaid expenses and other 4,704 9,899 ======================================================================= Total current assets 147,462 145,733 Property, plant and equipment, net 16,694 17,402 Goodwill and other intangible assets, net 9,090 9,233 Other assets 7,120 7,205 ======================================================================= Total assets $180,366 $179,573 ======================================================================= LIABILITIES & SHAREHOLDERS' INVESTMENT Current portion of long-term debt $1,079 $- Accounts payable 33,395 28,279 Accrued compensation and insurance 33,455 25,618 Other accrued expenses 18,597 20,464 Billings in excess of costs 11,132 16,611 ======================================================================= Total current liabilities 97,658 90,972 Long-term debt - 13,481 Other liabilities 2,460 2,539 ======================================================================= Total liabilities 100,118 106,992 ======================================================================= Common Stock 8,800 8,711 Additional paid-in capital 39,204 38,298 Retained earnings 36,180 29,477 Other comprehensive loss (881) (912) Unearned compensation expense (102) (40) Less - Treasury shares (2,953) (2,953) ======================================================================= Total shareholders' investment 80,248 72,581 ======================================================================= Total liabilities & shareholders' investment $180,366 $179,573 ======================================================================= SOURCE Michael Baker Corporation -0- 08/02/2004 /CONTACT: David Higie of Michael Baker Corporation, +1-412-269-6449/ /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20020605/BAKERLOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, photodesk@prnewswire.com / /Web site: http://www.mbakercorp.com / (BKR) CO: Michael Baker Corporation ST: Pennsylvania IN: CST OIL SU: ERN CCA MAV