EX-99.1 2 l32366aexv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
     
(BAKER LOGO)   News Release
         
 
  Contact:   David Higie
 
  Phone:   (412) 269-6449
 
  Release:   Immediate (June 30, 2008)
BAKER FILES 2007 FORM 10-K; RESTATES FINANCIAL RESULTS FOR 2006 AND FIRST THREE QUARTERS OF 2007
     PITTSBURGH — Michael Baker Corporation (Amex:BKR) today announced the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2007, which includes the restatement of the Company’s consolidated financial statements for the year ended December 31, 2006, and the first three quarters of 2007. As outlined in the filing with the Securities and Exchange Commission, Baker has restated these 2006 and 2007 financial statements as a result of the Company’s identification of accounting errors related to revenue recognition in its Energy business segment. The complete copy of the Form 10-K can be found on the Investor Relations portion of Baker’s website at www.mbakercorp.com.
     For 2007, the Company reported net income of $19.3 million, or $2.18 per diluted common share, on revenues of $727 million, compared to restated net income of $10.3 million, or $1.19 per diluted common share, on revenues of $647 million in 2006. The significant increase in net income was driven primarily by the favorable impact of project incentive awards received during the year, improved utilization in the Engineering business segment, and a reduction in the Company’s overall selling, general and administrative expenses.
     The Company’s Engineering business segment’s revenues in 2007 were $401 million, compared to revenues of $380 million in 2006. Contributing to this year-over-year revenue growth was an increase of $6.9 million in project incentive awards. The Company’s Energy business segment’s revenues in 2007 were $326 million, compared to restated revenues of $267 million in 2006, with the growth coming primarily from revenue increases associated with the segment’s onshore managed services contracts in Wyoming, Alabama and Alaska.
     Operating income before corporate overhead allocations in the Engineering segment for 2007 was $46.2 million, an increase of 53 percent compared to the operating income before corporate overhead allocations for 2006. Operating income before corporate overhead in the Energy business for 2007 was $6.2 million, a 39 percent decrease from the restated operating income before corporate overhead allocations for 2006.
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BAKER FILES 2007 FORM 10-K
     Total backlog for the Engineering and Energy businesses at year-end 2007 was $1.31 billion, compared to $1.30 billion at year-end 2006. Of these totals, $425.6 million and $337.3 million, respectively, are considered funded backlog for the Engineering segment. At December 31, 2007, $57 million of funded backlog related to the Company’s FEMA Map Modernization contract, compared to $64 million at December 31, 2006.
     From a balance sheet perspective, as of December 31, 2007, the Company had no long-term debt and a cash balance of approximately $22 million.
     Commenting on the 2007 results, President and Chief Executive Officer Bradley L. Mallory said, “We are pleased to have completed the restatement and to be able to report our outstanding 2007 financial performance. We can now place our complete focus on executing our business strategy for the Company, which includes growing our core Engineering business, both organically and through acquisition; resuming our evaluation of strategic alternatives, including a potential sale of our Energy business; and continuing to make the necessary process improvements which will contribute to increasing our profitability on a consistent basis.” He added that the Company has now met its deadline of June 30 for filing its 2007 Form 10-K, and remains on track to regain compliance with the American Stock Exchange listing standards by filing its quarterly report on Form 10-Q for the period ended March 31, 2008, with the Securities and Exchange Commission by July 31, 2008.
Conference Call
     Baker will hold a conference call and webcast at 10:00 a.m. EDT on Wednesday, July 2, to discuss these 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 www.mbakercorp.com.
     Michael Baker Corporation (http://www.mbakercorp.com) provides engineering and operations and maintenance services for its clients’ most complex challenges worldwide. The firm’s primary business areas are aviation, environmental, facilities, geospatial information technologies, pipelines and utilities, transportation, water/wastewater, and oil & gas. With more than 4,000 employees in over 50 offices across the United States and internationally, Baker is focused on creating value by delivering innovative and sustainable solutions for infrastructure and the environment.
(The above information contains forward-looking statements concerning our future operations and performance. Forward-looking statements are subject to market, operating and economic risks and uncertainties that may cause our actual results in future periods to be materially different from any future performance suggested herein. 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 our relationship and/or contracts with the Federal Emergency Management Agency (“FEMA”); changes in anticipated levels of government spending on infrastructure, including the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (“SAFETEA-LU”); changes in loan relationships or sources of financing; changes in management; changes in information systems; late SEC filings; and, the restatement of financial results. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.)
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ADD TWO — BAKER 2007 FINANCIAL RESULTS
FINANCIAL SUMMARY
(In thousands, except earnings per share)
Fourth Quarter Operating Results
(Unaudited)
                 
            Restated
    2007   2006
Revenues
   $ 195,836     $ 176,442  
 
                
Gross profit
     28,448       23,799  
 
                
Income from operations
     10,406       10,756  
 
                
Income before taxes
     11,186       12,363  
 
                
Net income
   $ 7,191     $ 8,443  
 
                
Net income per share:
                
Basic
     0.82       0.98  
Diluted
   $ 0.80     $ 0.98  
 
Full Year Operating Results
(Audited)
                 
            Restated
    2007   2006
Revenues
   $ 726,965     $ 646,668  
 
                
Gross profit
     100,496       86,030  
 
                
Income from operations
     31,375       16,206  
 
                
Income before taxes
     33,725       18,329  
 
                
Net income
   $ 19,340     $ 10,332  
 
                
Net income per share:
                
Basic
     2.21       1.21  
Diluted
   $ 2.18     $ 1.19  
 
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ADD THREE — BAKER 2007 FINANCIAL RESULTS
Segment Results
(In millions)
                                 
    For the three months   For the year
    ended December 31,   ended December 31,
    2007   2006-Restated   2007   2006-Restated
 
Revenues
                                
Engineering
   $ 111.8     $ 98.2     $ 401.5     $ 380.1  
Energy
     84.0       78.2       325.5       266.6  
 
Total revenues
   $ 195.8     $ 176.4     $ 727.0     $ 646.7  
 
 
                                
Income from operations before Corporate overhead
                                
Engineering
   $ 12.5     $ 9.7     $ 46.2     $ 30.1  
Energy
     2.7       6.9       6.2       10.2  
 
Total segment income from operations before Corporate overhead
     15.2       16.6       52.4       40.3  
 
Less: Corporate overhead
                                
Engineering
     (3.3 )     (4.1 )     (14.0 )     (16.5 )
Energy
     (1.3 )     (1.6 )     (5.3 )     (6.2 )
 
Total Corporate overhead
     (4.6 )     (5.7 )     (19.3 )     (22.7 )
 
Total income/(loss) from operations
                                
Engineering
     9.2       5.6       32.2       13.6  
Energy
     1.4       5.3       0.9       4.0  
Other Corporate income/(expense)
     (0.2 )     (0.1 )     (1.7 )     (1.4 )
 
Total income from operations
   $ 10.4     $ 10.8     $ 31.4     $ 16.2  
 
Backlog
(In millions)
                 
    At 12/31/07   At 12/31/06
Engineering
                
Funded
   $ 425.6     $ 337.3  
Unfunded
     696.6       719.8  
 
Total Engineering
     1,122.2       1,057.1  
Energy
     191.7       238.6  
 
Total
   $ 1,313.9     $ 1,295.7  
 
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ADD FOUR — BAKER 2007 FINANCIAL RESULTS
Condensed Balance Sheet
(In thousands)
                 
            Restated
    At 12/31/07   At 12/31/06
ASSETS
                
Cash and cash equivalents
   $ 22,052     $ 13,182  
Receivables, net
     109,453       97,815  
Unbilled revenues
     88,214       92,341  
Prepaid expenses and other
     14,718       16,044  
 
Total current assets
     234,437       219,382  
 
                
Property, plant and equipment, net
     16,776       21,323  
Goodwill and other intangible assets, net
     17,367       17,575  
Other long-term assets
     7,770       5,636  
 
Total assets
   $ 276,350     $ 263,916  
 
 
                
LIABILITIES & SHAREHOLDERS’ INVESTMENT
                
Accounts payable
   $ 55,940     $ 55,173  
Accrued compensation and insurance
     41,974       38,173  
Other accrued expenses
     36,123       41,767  
Billings in excess of revenues
     15,771       17,042  
 
Total current liabilities
     149,808       152,155  
 
                
Other long-term liabilities
     11,485       18,140  
 
Total liabilities
     161,293       170,295  
 
 
                
Common Stock
     9,306       9,194  
Additional paid-in capital
     47,356       44,676  
Retained earnings
     63,060       44,671  
Other comprehensive income/(loss)
     96       (159 )
Less — Treasury shares
     (4,761 )     (4,761 )
 
Total shareholders’ investment
     115,057       93,621  
 
Total liabilities & shareholders’ investment
   $ 276,350     $ 263,916  
 
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