Press Release Source: MISCOR Group, Ltd.
MISCOR Group Reports 83 Percent Increase in Revenues, Record Net Income for First Quarter
Wednesday May 14, 4:05 pm ET
Increased Sales Across All Segments Fuel Growth
SOUTH BEND, Ind., May 14 /PRNewswire-FirstCall/ -- Industrial services provider MISCOR Group, Ltd. (OTC Bulletin Board: MIGL - News) reported record quarterly profit for the first quarter ended March 31, 2008, on the strength of a 74 percent increase in sales in its Repair, Remanufacturing and Manufacturing segment (RRM) and a 112 percent increase in sales in its Construction and Engineering Services (CES) segment.
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MISCOR, a supplier of mechanical and electrical industrial services and products, reported net sales of $29.7 million for the first quarter of 2008, compared to net sales of $16.1 million for the same period in 2007. The top-line gains from increased product sales and service revenues helped the Company post net income of $457,000, or $0.04 per diluted share, in the first quarter of 2008, reversing a net loss of $2.6 million, or $0.38 per diluted share, in the first quarter of 2007. The 2007 first quarter results included a $2.3 million loss on debt extinguishment concurrent with the Company's $12.5 million private placement that was completed in order to increase working capital $5.8 million and reduce long-term debt by approximately $6.7 million.
The 2008 first quarter results reflected an increase in service revenues to $23.5 million, compared to $10.9 million in the first quarter of 2007. The Company said service revenue growth benefited from higher demand in both domestic and international markets for motor repair, testing and maintenance, including MISCOR's growing railroad services business. First quarter 2008 product sales increased 18 percent to $6.2 million, compared to $5.2 million in the prior year period, on higher product sales of diesel engine power assemblies. MISCOR reported operating income more than quadrupled in the current quarter to $745,000, compared to $176,000 in the first quarter of 2007, while gross profit grew 65 percent to $4.7 million.
"Our first quarter results are a continuation of the momentum we established last year as we consistently execute on both organic and acquisition-based growth opportunities," said John Martell, CEO of MISCOR. "Our profit growth in the quarter and our significant increase in product sales and service revenues are due to a combination of efficient operations and the ongoing efforts of our sales teams to grow client relationships. As we continue to focus on winning new contracts while growing our customer footprint, we are well-positioned to continue emerging as a national industrial services provider of choice."
Segment Results:
Repair, Remanufacturing and Manufacturing (RRM) and Construction and Engineering Services (CES)
For the first quarter of 2008, RRM segment posted a 74 percent increase in revenues to $21.1 million, a $9.0 million increase compared to the first quarter of 2007. This increase is primarily related to higher sales of motors, magnets and other industrial products and services. The CES segment more than doubled its revenue to $4.5 million, an increase of 112 percent over the preceding year, due to an increasing demand for power distribution systems and strong demand in the regional construction market for electrical and mechanical contracting services.
"This quarter highlighted our ability to win new contracts and grow our base business, while also successfully integrating our acquisitions," said Rich Mullin, chief financial officer of MISCOR. "Our increases in product sales and service revenues, combined with operating and margin improvements, propelled us further towards our goal of sustained profitability as evidenced by our 4th consecutive quarterly profit."
Martell concluded: "We made several strategic moves in the first quarter that are quickly beginning to pay dividends for us. The acquisition of American Motive Power and our sales teams' ability to quickly triple our newest division's backlog have helped to further solidify our place among the premier service providers. In addition, our ability to put together increasingly larger international and domestic contracts, coupled with our expanding domestic geographic service area, is a clear signal that we are taking our place at the forefront of our industry in providing diversified mechanical and electrical services and products."
About MISCOR
South Bend, Ind.-based MISCOR Group, Ltd. (OTC Bulletin Board: MIGL - News) provides electrical and mechanical solutions to industrial, commercial and institutional customers through two segments: RRM (repair, remanufacturing and manufacturing) segment, which provides maintenance and repair services for industrial motors, generators, lifting magnets, locomotives and locomotive engines, and diesel engine component manufacturing, remanufacturing and repair services; and CES (construction and engineering services) segment, which provides a wide range of electrical and mechanical contracting services and engineering and repair services for electrical power distribution systems.
In 2007, MISCOR entered the wind power industry through its acquisition of 3-D Service, Ltd., providing both onsite and in-shop maintenance and repair services for wind farms. MISCOR was ranked on the Inc. 500 in 2004 and 2005 and has grown to more than 650 employees in 14 locations nationwide.
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