MISCOR Group Reports Significant Net Income, Sales Growth in Third Quarter
SOUTH BEND, Ind., Nov. 12 /PRNewswire-FirstCall/ -- Industrial services provider MISCOR Group, Ltd. (OTC:MIGL) (BULLETIN BOARD: MIGL) reported sharply higher net income on a 78 percent increase in sales in the third quarter ended September 30, 2008. MISCOR's positive performance for the quarter was driven by strong service-related revenue and product sales, key acquisitions and new facility growth, as well as ongoing expense management.
MISCOR nearly doubled its top line in the third quarter, reporting net sales of $31.5 million, compared to net sales of $17.7 million in the third quarter of 2007. Net income increased more than 600 percent to $471,000, or $0.04 per diluted share, in the third quarter of 2008, compared to net income of $64,000, or $0.01 per diluted share, in the 2007 comparable period. In addition, operating income more than doubled to $679,000 in the third quarter of 2008.
The strong sales gains in the quarter were driven primarily by a 118 percent increase in service revenues to $25.3 million, compared to $11.6 million in the year-ago period. The Company noted the gains in service revenues were a result of new contracts from its expanding international customer base and increasing industry recognition for its service expertise and performance. During the third quarter, MISCOR began operating its AMP Rail Services Canada service center, located in Montreal, which provided the Company with significant track access to the Canadian National (CN) main line, establishing AMP as the first single-source locomotive overhaul and repair shop in the area. In addition, the Company acquired California-based Visalia Electric Motor Shop, a leading provider of repair, maintenance and overhaul services for motors, generators and the growing wind industry. MISCOR's acquisition of Visalia expanded its service reach to 14 Western states that form one of the largest concentrations of wind turbines in the United States.
"Our third quarter results are a reflection of our ability to simultaneously increase sales and profitability, while strategically expanding the Company into new, high-growth-potential markets," said John Martell, president and CEO of MISCOR. "With the introduction of a new rail service center in Montreal, as well as expanding our repair, remanufacturing and service work in both the locomotive and wind industries, we are confident in our ability to drive the business forward, and we expect to continue our momentum into the fourth quarter."
For the first nine months of 2008, MISCOR reported an 81 percent increase in net sales to $91.7 million, compared to net sales of $50.6 for the first nine months of 2007. The increase in sales in the period was driven by a 118 percent increase in service revenues to $73.0 million, and a 9 percent increase in product sales to $18.7 million. MISCOR's acquisition in January 2008 of Dansville, NY-based AMP Rail Services contributed to the sales increase. MISCOR posted net income of $1.5 million, or $0.13 per dilute share, for the first nine months of 2008, compared to a net loss of $2.3 million, or $0.32 per dilute share, in the year-ago period. In addition, operating income more than doubled to $2.4 million, compared to $960,000 for the first nine months of 2007.
Martell added: "We are pleased with our progress through the first nine months of 2008, especially as we continue to see growth in the number of service contracts due to the efforts of our dedicated sales team. In addition, our new California location provides us with new customer opportunities now that we can more easily service this region, an area which is widely recognized as having the greatest concentration of wind turbines in the country."
Segment Results:
Repair, Remanufacturing and Manufacturing (RRM) and Construction and Engineering Services (CES)
For the third quarter of 2008, RRM realized a 59 percent increase in sales to $21.7 million, including an increase of $4.8 million in motors, magnets and other industrial products and services, as well as an increase of $4.5 million in services related to locomotive and locomotive engine rebuilding and remanufacturing CES increased sales 140 percent to $9.7 million, on the strength of a $2.5 million gain in electrical contracting services and $3.2 million in revenue contribution from the Oct. 2007 acquisition of Ideal Consolidated. MISCOR noted the growth in CES revenue was a result of a strong local construction market as well as growing name brand recognition.
"Our strong results are due to our ongoing ability to control expenses and effectively manage the fast pace of our business," said Rich Mullin, chief financial officer of MISCOR. "As we continue to evaluate new opportunities, both geographically and from a product and services standpoint, we remain committed to controlling costs and investing in top-tier frontline talent as we continue our transformation into North America's service provider of choice."
Martell concluded: "We are very pleased with our results and the growth we have experienced both in the third quarter and throughout 2008. The investment we made across all aspects of the business, our strategic approach to evaluating new opportunities, and our ability to quickly and efficiently integrate new subsidiaries into our business model, have positioned us to not only finish 2008 with record results, but provide the foundation to push the Company higher in 2009."
About MISCOR
South Bend, Ind.-based MISCOR Group, Ltd. (OTC BB: MIGL) provides electrical and mechanical solutions to industrial, commercial and institutional customers through two segments: the 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 the 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 700 employees in 16 locations in the U.S. and Canada.
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