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Versar, Inc. Announces Second Quarter Fiscal 2014 Results

SPRINGFIELD, Va., Feb. 10, 2014 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fiscal second quarter and six months ended December 27, 2013. 

Gross revenue for the second quarter of fiscal year 2014 was $28.0 million, an increase of 16% compared to $24.1 million during the second quarter of the last fiscal year.  The increase was attributable to revenue generated by Geo-Marine, Inc. (GMI); continued activity associated with its ongoing contract with the U.S. Army Corps of Engineers (USACE) for construction support services in Afghanistan; and the continued ramp up of the Company's performance based remediation (PBR) work for the U.S. Air Force in New England and the Great Lakes Region.

The company reported a reduction in gross margins for the quarter primarily due to the decrease in gross profit related to Title II work in Afghanistan, which is anticipated to end in the summer of 2014.  The Company reported net income of $100,000, or $0.01 per share on a fully diluted basis (which includes $0.02 from discontinued operations) compared to net income of $925,000 or $0.09 per share on a fully diluted basis (which included a loss of $0.03 from discontinued operations) for the second quarter last year. 

For the six months ended December 27, 2013, Versar had gross revenue of $57.2 million, an increase of 23% as compared to gross revenue of $46.5 million in the first six months of fiscal 2013.  This revenue increase and lower gross margins for the six months was primarily a result of factors noted above in the second quarter discussion.  Versar recorded net income of $757,000 or $0.08 per share on a fully diluted basis (which includes $0.02 from discontinued operations) in the first six months of fiscal 2014 as compared to $1.8 million or $0.18 per share on a fully diluted basis (which includes a loss of $0.04 from discontinued operations) for the first six months of fiscal 2013.        

As of December 27, 2013, Versar recorded funded backlog of approximately $120 million, an increase of 12% compared to $108 million of funded backlog at the end of fiscal year 2013.

Versar closed the fiscal second quarter of 2014 with a cash balance of approximately $4 million and stockholders' equity of $38.5 million.

Tony Otten, CEO of Versar said, "We achieved solid revenue growth in the second quarter and are particularly pleased with this result, given the government shutdown during the quarter that delayed some contract awards and caused a temporary slowdown in activity for some of our existing projects.  While revenue increased, profitability for the quarter was below historical levels due to higher purchased services and materials related to our PSC and PBR programs. In addition, we had some one-time costs associated with final tax payments related to our fiscal year 2012 acquisition of Charron Construction Consulting, Inc. and severance costs associated with our recent acquisition of GMI.

"Our backlog grew 12% from our June 28, 2013 fiscal year end.  During the quarter, we were awarded $1.1 million in new awards and $440,000 in subcontract extensions from HDR for continued construction management and quality assurance operations in support of the Air Force in Afghanistan. This is in addition to the $8.8 million in awards we received during the last quarter of fiscal 2013 and the first quarter of this fiscal year. These extensions bring our HDR subcontract total to just under $40 million over the life of the subcontract.  This is one of our many contracts in the region and demonstrates the level of confidence our government has in the services we provide.  Additionally, following the close of the quarter we were awarded a $2.25 million contract with Frederick County, Maryland to provide municipal stormwater permit support and a $1.5 million extension of our personal services and support contract with the U.S. Army Corps of Engineers in Iraq." 

Mr. Otten continued, "We continue to make progress with the GMI integration and are encouraged by the strategic benefits of their technical capabilities and diverse customer base.  Our balance sheet remains solid, positioning us well for continued organic growth and providing flexibility for our pursuit of complementary acquisitions."

Conference Call:

The Company will hold a conference call at 2:00 PM Eastern Time today, Monday, February 10 to discuss the Company's operational performance and financial results for its quarter ended December 27, 2013. 

The dial in number for the US and Canada is toll free, 877-407-8033. The international dial in number is 201-689-8033. Participants should call in a few minutes before 2:00 PM Eastern Time. For those unable to attend the conference call, a replay will be available on Versar's website, www.versar.com

VERSAR, INC., headquartered in Springfield, Virginia, is a publicly traded global project management company providing sustainable value oriented solutions to government and commercial clients in the construction management, environmental services, munitions response, and professional services market areas.

VERSAR operates a number of web sites, including the corporate web sites, www.versar.com, www.geomet.com, www.viap.com, www.dtaps.com, www.adventenv.com, www.charronconsulting.com, and www.ppsgb.com.

This news release contains forward-looking information.  The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended June 28, 2013, as updated from time to time in the Company's periodic filings. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements.

(Logo: http://photos.prnewswire.com/prnh/20120806/NE52646LOGO )




Contact:

David Gray

John Nesbett or Jennifer Belodeau


Director of Financial Reporting

Institutional Marketing Services (IMS)


Versar, Inc.   

(203) 972-9200


(703) 642-6888

jnesbett@institutionalms.com


dgray@versar.com


 

VERSAR, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)



As of



December 27,
2013
(Unaudited)


June 28,
2013

ASSETS





Current assets





Cash and cash equivalents

$

4,045

$

8,728

Accounts receivable, net


35,689


29,342

Inventory


1,189


1,225

Prepaid expenses and other current assets


1,192


1,074

Deferred income taxes


1,993


2,314

Income tax receivable


1,922


1,764

Total current assets


46,030


44,447

Property and equipment, net


2,256


2,108

Deferred income taxes, non-current


890


622

Goodwill


9,420


7,515

Intangible assets, net


2,887


1,798

Other assets


1,188


887

Total assets

$

62,671

$

57,377






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities





Accounts payable

$

11,904

$

10,788

Accrued salaries and vacations


3,541


3,042

Other current liabilities


3,527


3,304

Income tax payable


293


-

Notes payable, current


1,641


333

Total current liabilities


20,906


17,467

Notes payable, non-current


635


333

Deferred income taxes


1,098


849

Other long-term liabilities


1,501


1,104

 Total liabilities


24,140


19,753

Commitments and contingencies





Stockholders' equity





Common stock,  $.01 par value; 30,000,000 shares authorized; 
9,962,885 shares issued and 9,658,107 shares outstanding 
as of December 27, 2013 
9,849,773 shares issued and 9,579,753 shares outstanding 
as of June 28, 2013


100


99

Capital in excess of par value


30,101


29,758

Retained earnings


10,122


9,366

Treasury stock, at cost


(1,396)


(1,224)

Accumulated other comprehensive loss;
    foreign currency translation


(396)


(375)

Total stockholders' equity


38,531


37,624

Total liabilities and stockholders' equity

$

62,671

$

57,377

 

VERSAR, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited-in thousands, except per share amounts)



For the Three Months Ended


For the Six Months Ended



December 27,
2013


December 28,
2012


December 27,
2013


December 28,
2012










GROSS REVENUE

$

28,037

$

24,122

$

57,158

$

46,518

   Purchased services and materials, at cost


14,359


9,540


28,769


17,237

   Direct costs of services and overhead


11,347


10,617


23,105


21,845

GROSS PROFIT


2,331


3,965


5,284


7,436










   Selling, general and administrative expenses


2,415


2,249


4,285


4,174

OPERATING (LOSS) INCOME


(84)


1,716


999


3,262










OTHER (INCOME) EXPENSE









   Interest income


(13)


-


(13)


(1)

   Interest expense


42


22


67


46

 (LOSS) INCOME BEFORE INCOME TAXES,
from continuing operations


(113)


1,694


945


3,217










   Income tax (benefit) expense


(34)


511


364


1,092










NET (LOSS) INCOME  FROM CONTINUING OPERATIONS


(79)


1,183


581


2,125

Income (Loss) from discontinued operations, net of tax

(expense) benefit of $(105) and $121 and $(105) and $174


179


(258)


176


(355)

NET INCOME

$

100

$

925

$

757

$

1,770










NET (LOSS) INCOME PER SHARE-BASIC and DILUTED









   Continuing operations

$

(0.01)


0.12

$

0.06


0.22

   Discontinued operations


0.02


(0.03)


0.02


(0.04)

NET INCOME PER SHARE-BASIC and DILUTED

$

0.01

$

0.09

$

0.08

$

0.18










WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING-BASIC


9,653


9,507


9,611


9,450

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING-DILUTED


9,789


9,536


9,748


9,479

 

 

SOURCE Versar, Inc.

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