EX-99.1 2 mb2636ex991.txt Exhibit 99.1 BAKER REPORTS REVENUE AND EPS GAINS FOR FIRST QUARTER OF 2005 PITTSBURGH, May 4 /PRNewswire-FirstCall/ -- Michael Baker Corporation (Amex: BKR) today reported improved financial results for the first quarter of 2005 compared to the year-ago period. (Logo: http://www.newscom.com/cgi-bin/prnh/20020605/BAKERLOGO ) For the quarter, Baker posted net income of $3.5 million, or $0.40 per diluted share, on total contract revenues of $144 million. This compares with net income of $3.1 million, or $0.37 per diluted share, on total contract revenues of $125 million in first-quarter 2004. The current quarter benefited from the receipt of an incentive award related to the FEMA contract and a higher revenue and operating performance in the Engineering segment, but was adversely impacted by lower than anticipated volume and labor realization levels in one part of the Energy segment. The 2004 first-quarter performance also benefited from a strong performance in the Engineering segment, as well as lower insurance and related costs and the sale of shares held of an insurance firm. Revenues in the Engineering business were 25 percent greater than the same period last year, largely the result of the FEMA contract. Operating income before corporate overhead allocations increased 42 percent with the major factor being the impact of the delayed $2.2 million FEMA incentive award for work performed during the third quarter of 2004. This is the second award that the company has received under the year-old FEMA contract. The first award was made in December 2004 and covered work performed in the second quarter of last year. Operating income before corporate overhead allocations expressed as a percentage of Engineering segment revenues were 10.8 percent for first-quarter 2005, compared to 9.5 percent in first-quarter 2004. Revenues in the Energy business were virtually the same as the first quarter of 2004 due to a significant decline in revenue from the Applied Technology business, which involves primarily the development and implementation of computerized maintenance management systems in client facilities. Excluding the decrease associated with the Applied Technology business, the remainder of the Energy segment reported a revenue gain of four percent. Operating income before corporate overhead allocations also decreased substantially compared to first-quarter 2004 due to the delay or cancellation of contracts in the Applied Technology business. As a result, operating income before corporate overhead allocations expressed as a percentage of segment revenues were less than one percent for the current quarter 2005, an increase over the fourth quarter of 2004 but down from the 4.8 percent in the year-ago period. The provision for income tax rate for the 2005 first quarter was 42 percent, compared to 47 percent for the same period last year. The decrease in the tax rate is attributable to lower estimated foreign taxes for 2005 and expected 2005 benefits from certain state tax net operating loss carry forwards. Total backlog for the company was $1.42 billion at March 31, 2005, compared to $1.40 billion at year-end 2004. The first-quarter 2005 backlog includes approximately $644 million related to the FEMA contract. Commenting on the results, President and Chief Executive Officer Donald P. Fusilli, Jr., said, "Our Engineering business continues to perform well as a result of our FEMA contract and the strength of our Federal sector initiative. We are now beginning to recognize the benefits that our performance-based contracting model can deliver. The performance of our Energy segment was disappointing, but we have taken action to correct the situation and are continuing to see a growing number of opportunities both domestically and internationally as oil and gas companies are making significant capital investments to meet the growing worldwide demand for energy and require high- quality operations and maintenance services to assist in their efforts." He added that the company is still in negotiations with FEMA over an extension of the first-year task order and the task order for year two, and will not be in a position to provide 2005 guidance until those negotiations are completed. Michael Baker Corporation has scheduled a conference call and webcast for Thursday, May 5, at 10:00 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 ( http://www.mbakercorp.com ) provides engineering and operations and maintenance services for its clients' most complex challenges worldwide. The firm's primary practice areas are aviation, environmental, facilities, geospatial information technologies, linear utilities, transportation, water/wastewater, and oil & gas. With more than 4,200 employees in over 40 offices across the United States and internationally, Baker is focused on providing services that span the complete life-cycle of infrastructure and managed asset projects. (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 the Company's relationship and/or contracts with FEMA; changes in anticipated levels of government spending on infrastructure, including TEA-21; changes in loan relationships or sources of financing; changes in management; changes in information systems; and costs to comply with the requirements of the Sarbanes-Oxley Act of 2002. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.) FINANCIAL SUMMARY (Unaudited) First Quarter Operating Results For the quarter ended March 31 ---------------------------------------------- ------------------------------- (In thousands, except earnings per share) 2005 2004 ---------------------------------------------- --------- --------- Total contract revenues $ 143,963 $ 125,005 Gross profit $ 22,917 $ 20,941 Income from operations $ 5,723 $ 5,385 Income before taxes $ 5,959 $ 5,845 Net income $ 3,456 $ 3,098 Weighted average shares outstanding: Basic 8,524 8,320 Diluted 8,727 8,421 Net income per share: Basic $ 0.41 $ 0.37 Diluted $ 0.40 $ 0.37 ========= ========= Segment results For the quarter ended March 31 ---------------------------------------------- ------------------------------ (In millions) 2005 2004 ---------------------------------------------- ---------- ---------- Engineering ----------- Revenues $ 93.9 $ 74.9 Income from operations before Corporate overhead 10.1 7.1 Less: Corporate overhead (2.8) (2.8) ---------- ---------- Income from operations 7.3 4.3 ---------- ---------- Energy ------ Revenues 50.1 50.1 Income from operations before Corporate overhead 0.1 2.4 Less: Corporate overhead (1.1) (1.1) ---------- ---------- (Loss)/income from operations (1.0) 1.3 ---------- ---------- Total Reportable Segments ------------------------- Revenues 144.0 125.0 Income from operations before Corporate overhead 10.2 9.5 Less: Corporate overhead (3.9) (3.9) ---------- ---------- Income from operations 6.3 5.6 ---------- ---------- Other Corporate/Insurance expense (0.6) (0.2) ---------- ---------- Total Company - Income from operations $ 5.7 $ 5.4 ========== ========== Backlog (In millions) At 3/31/05 At 12/31/04 ---------------------------------------------- ---------- ----------- Total $ 1,420.6 $ 1,399.5 ========== =========== Condensed Balance Sheet ---------------------------------------------- (In thousands) At 3/31/05 At 12/31/04 ---------------------------------------------- ---------- ----------- ASSETS Cash and cash equivalents $ 9,197 $ 15,471 Receivables, net 91,206 79,559 Unbilled revenues 72,200 71,280 Prepaid expenses and other 9,322 12,941 ---------- ---------- Total current assets 181,925 179,251 Property, plant and equipment, net 17,528 17,879 Goodwill and other intangible assets, net 8,876 8,947 Other assets 6,244 5,667 ---------- ---------- Total assets $ 214,573 $ 211,744 ========== ========== LIABILITIES & SHAREHOLDERS' INVESTMENT Accounts payable $ 50,076 $ 48,326 Accrued compensation and insurance 34,884 36,458 Other accrued expenses 23,872 24,629 Billings in excess of revenues 9,615 9,705 ---------- ---------- Total current liabilities 118,447 119,118 Other liabilities 5,621 6,094 ---------- ---------- Total liabilities 124,068 125,212 ---------- ---------- Common Stock 8,939 8,910 Additional paid-in capital 40,503 40,000 Retained earnings 45,225 41,769 Other comprehensive loss (1,163) (1,129) Unearned compensation expense (46) (65) Less - Treasury shares (2,953) (2,953) ---------- ---------- Total shareholders' investment 90,505 86,532 ---------- ---------- Total liabilities & shareholders' investment $ 214,573 $ 211,744 ========== ========== SOURCE Michael Baker Corporation -0- 05/04/2005 /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