MISCOR Group Reports First Quarter Results
May 15, 2009 6:13:00 PM
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View Additional ProfilesSOUTH BEND, Ind., May 15 /PRNewswire-FirstCall/ -- Industrial services provider MISCOR Group, Ltd. (OTC Bulletin Board: MIGL) reported its operating results for first quarter ended April 5, 2009.
MISCOR, a supplier of mechanical and electrical industrial products and services, reported total revenues of $23.4 million in the first quarter of 2009, compared with total revenues of $29.7 million in the same quarter of 2008, a decrease of $6.3 million. The Company reported a net loss of $3.7 million, or $0.32 per diluted share, for the 2009 first quarter, versus net income of $0.5 million, or $0.04 per diluted share, for last year's first quarter.
MISCOR attributed the decline in net sales and earnings to the ongoing challenges in global economic conditions.
"We were not immune from the economic and consumer pullback and resulting slowdown in manufacturing and industrial production that is hitting every segment of the market. However, we remain diligent in working to grow our market share to position ourselves for the inevitable rebound and we're seeing success with new order activity, particularly in our wind services operations and electrical contracting," said John Martell, president and CEO of MISCOR."
As a result of the challenging economic environment, the Company has implemented several strategic changes within their operations. Some of these items include a 29% reduction in work force, reduced work weeks in certain locations and some temporary plant shut downs in the HK Engine Component business. In addition, MISCOR consolidated production within the industrial services segment and moved those operations to other existing facilities. The Company continues to evaluate additional production consolidations to enhance operational efficiency.
Total gross profit for the first quarter of 2009 was $1.7 million or 7 percent of total revenues compared to gross profit of $4.7 million or 16 percent of total revenues in the same period of 2008. The company attributed the decline to decreased consolidated revenues and increased cost levels from unabsorbed overhead costs and cost overruns on a few of the company's electrical contracts.
As of April 5, 2009, MISCOR had approximately $11.7 million of working capital, reflecting a decrease of approximately $3.4 million versus the prior year. The decline was primarily attributed to decreased accounts receivable, which resulted in reduced availability of the company's revolving credit line.
Segment Results:
In the fourth quarter of 2008, MISCOR realigned its financial reporting into three segments to bring additional clarity to its results:
-- Industrial services - consisting of the Company's maintenance and
repair services to several industries including electric motor and wind
power and repairing, manufacturing, and remanufacturing industrial
lifting magnets for the steel and scrap industries
-- Construction and engineering services - consisting of the
Company's electrical and mechanical contracting services, mainly to
industrial, commercial and institutional customers
-- Rail services - consisting of the Company's manufacturing and
rebuilding of power assemblies, engine parts and other components
related to large diesel engines, and its locomotive maintenance,
remanufacturing and repair services for the rail industry.
MISCOR's decrease in consolidated revenues in the first quarter of 2009 resulted from declines in industrial services segment revenues of $5.1 million, declines in construction and engineering services revenues of $0.7 million and declines in rail services revenue of $0.4 million. All three segments were adversely affected by the economic recession and reductions in demand among the manufacturing, transportation and construction industries, as well as by the liquidity pressures leading to production slowdowns.
In December of 2008, MISCOR launched a Traffic and Telecommunication Division within Martell Electric and the construction and engineering services segment. Since operations began, the division secured $11 million in new contracts and continues to capture additional revenue surrounding a variety of highway specialty projects. The largest contract secured is a $6.7 million Intelligent Highway System project for the Michigan Department of Transportation around the City of Grand Rapids.
Within the industrial services segment, Magnetech continues to expand and develop its power services group with new relationships for in-shop and field service work for oil filled transformers which is a new area of focus that started in the third quarter of 2008. Additionally, the Company has increased operations for the wind power industry particularly with the addition of the service center by obtaining new contracts in the service and repair of larger turbine work.
Martell concluded: "Our strategy continues to be based on better aligning our core assets with the growth opportunities in wind power, transformer, traffic and telecommunications expected to result from governmental stimulus and energy independence initiatives. We continue to see 2009 as a year of intense focus and execution, and will run our business accordingly."
About MISCOR
South Bend, Ind.-based MISCOR Group, Ltd. (OTC BB: MIGL) provides electrical and mechanical solutions to industrial, commercial and institutional customers through three segments: Industrial Services, consisting of the Company's maintenance and repair services to several industries including electric motor and wind power and repairing, manufacturing, and remanufacturing industrial lifting magnets for the steel and scrap industries, Construction and Engineering Services, consisting of MISCOR's electrical and mechanical contracting services, mainly to industrial, commercial, and institutional customers, and Rail services, consisting of the Company's manufacturing and rebuilding of power assemblies, engine parts, and other components related to large diesel engines and its locomotive maintenance, remanufacturing, and repair services for the rail industry.
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 operates in 15 locations in the U.S. and Canada.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "could," "will," or variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect the Company's views, expectations and beliefs at the time such statements were made with respect to such matters, and may cover such items as the Company's future plans, objectives, events, contract pricing and results such as revenues, expenses, income, earnings per share, capital expenditures, operating margins, financial position, expected results of operations and other financial items. There are a number of factors, many of which are beyond the Company's control, which could cause actual results and outcomes to differ materially from those described in the forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that make the timing, extent, likelihood and degree of occurrence of these matters difficult to predict. Risk Factors include, among others: price of raw materials, ability to win and service competitively priced new contracts in sufficient amounts to operate and expand effectively, employee turnover, ability to compete in highly competitive, geographically diverse marketplaces, and varying and sometimes volatile economic conditions. For further discussion of risks and uncertainties, individuals should refer to the Company's SEC filings. MISCOR Group, Ltd. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release is issued. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.
SOURCE MISCOR Group, Ltd.
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Karen Keller
kkeller@lambert-edwards.com
or Jeff Lambert
both of Lambert
Edwards & Associates
Inc.
+1-616-233-0500
for MISCOR Group
Ltd.
