DBMG DBM Global Inc (CE)

Schuff International, Inc. (Pink Sheets: SHFK), a family of companies providing fully integrated steel construction services, today reported financial and operating results for the first quarter ended April 4, 2010.

Schuff's first quarter 2010 financial results were attributable to lower commercial construction activity throughout the U.S., including Las Vegas, offset by revenues derived from new industrial, energy and healthcare projects, particularly in the Gulf Coast and Pacific regions.

First Quarter 2010 Results:

Revenues for the first quarter ended April 4, 2010 were $82.0 million, a decrease of 36.5 percent from year-ago revenues of $129.2 million.

Gross profit as a percentage of revenue was 15.6 percent for the first quarter ended April 4, 2010, compared with 22.3 percent for the first quarter ended April 5, 2009.

Operating income for the first quarter of 2010 was $2.8 million, down 82.6 percent from $16.0 million in the year-ago quarter. Operating margin decreased to 3.4 percent from 12.4 percent in the year-ago period, due primarily to lower revenues earned during the quarter.

Net income for the quarter was $1.6 million, or $0.16 per diluted share, versus $9.6 million, or $1.03 per diluted share, a year ago.

Schuff International’s backlog was $184.1 million ($147.3 million under contracts or purchase orders and $36.8 million under letters of intent) at April 4, 2010 compared with $220.5 million ($184.5 million under contracts or purchase orders and $36.0 million under letters of intent) at January 3, 2010. Approximately $59.2 million, representing 32.2% of the company’s backlog at April 4, 2010, was attributable to five contracts, letters of intent, notices to proceed or purchase orders.

“As we expected, the market environment continued to be challenging in the first quarter of 2010,” said Scott A. Schuff, president and CEO. “Throughout the organization, our team executed at a high level to strengthen our financial condition during the ongoing downturn in commercial construction. Although we don’t expect to see significant new commercial bid flow for the next several quarters, we were encouraged by activity in industrial, energy and healthcare projects in the quarter, particularly in the Gulf Coast and Pacific regions.

“Despite our current challenges, we continue to be optimistic about the longer-term prospects for our business. Schuff’s design-assist capabilities for fast-track projects continue to help us win new business, and we believe our industry-leading capabilities will continue to be a competitive advantage as new projects come on line.

“In addition, we are increasing our business development efforts, strengthening our alliances with partners and pursuing work in new markets, including alternative energy projects. Schuff is also pursuing substantially more public-sector work,” concluded Schuff.

Schuff International, Inc. (Pink Sheets: SHFK) and its family of steel companies is the largest steel fabrication and erection company in the United States. The 34-year old company executes projects throughout the country as well as internationally. Schuff offers integrated steel construction services from a single source including design-build, design-assist, engineering, BIM participation, 3D steel modeling/detailing, fabrication, advanced field erection, joist and joist girder manufacturing, project management, and single-source steel management systems. Schuff International, Inc. employs approximately 1,300 people throughout the country. For more information, visit www.schuff.com.

Certain statements in this news release may contain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. These risks and uncertainties, some of which are beyond the control of the company, include, but are not limited to, the company's ability to successfully and timely complete construction projects; the company’s ability to convert backlog into revenue; the potential delay, suspension, termination, or reduction in scope of a construction project; the continuing validity of the underlying assumptions and estimates of total forecasted project revenues, costs and profits and project schedules; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings; the availability of borrowed funds on terms acceptable to the company; the ability to retain certain members of management; the ability to obtain surety bonds to secure its performance under certain construction contracts; possible labor disputes or work stoppages within the construction industry; the ability of project owners to obtain and/or continue to maintain financing for projects; possible changes or developments in domestic and worldwide financial, political and social circumstances; and actions taken or not taken by third parties, including the company’s customers, suppliers, business partners, and competitors and legislative, regulatory, judicial and other governmental authorities and officials. The company cautions that these forward-looking statements are further qualified by other factors. The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.

 

SCHUFF INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

    Three months ended April 4

2010

  April 5

2009

(in thousands, except per share data)   Revenues $ 81,988 $ 129,193 Cost of revenues   69,216       100,379   Gross profit 12,772 28,814   General and administrative expenses   9,983       12,788   Operating income 2,789 16,026 Interest expense (311 ) (1,073 ) Other income   78       164   Income before income taxes 2,556 15,117 Income tax provision   (979 )     (5,544 ) Net income $ 1,577     $ 9,573     Income per share: Basic $ 0.16     $ 1.35   Diluted $ 0.16     $ 1.03     Weighted average shares used in computation: Basic   9,656       7,081   Diluted   9,706       9,664          

SCHUFF INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

 

April 4

2010

 

January 3

2010

  (in thousands) Assets Current assets: Cash and cash equivalents $ 63,877 $ 47,618 Receivables 82,805 93,239 Income tax receivable 664 1,554 Costs and recognized earnings in excess of billings on uncompleted contracts 11,691 7,966 Inventories 15,176 15,915 Deferred tax asset 2,775 2,775 Prepaid expenses and other current assets   1,254       1,263   Total current assets 178,242 170,330   Property and equipment, net 71,724 71,406 Goodwill, net 17,115 17,115 Other assets   3,756       3,662   $ 270,837     $ 262,513   Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 23,784 $ 18,723 Accrued payroll and employee benefits 9,387 8,165 Accrued interest 3 84 Other current liabilities 6,866 6,823 Billings in excess of costs and recognized earnings on uncompleted contracts 45,325 43,571 Current portion of long-term debt   3,470       3,470   Total current liabilities 88,835 80,836   Long-term debt 8,805 10,493 Deferred income taxes 5,226 5,226 Other liabilities   264       274     14,295       15,993     Stockholders’ equity: Preferred stock, $.001 par value – authorized 1,000,000 shares; none issued – – Common stock, $.001 par value – 20,000,000 shares authorized, 10,038,057 and 10,037,557 shares issued, and 9,656,145 and 9,655,645 shares outstanding in 2010 and 2009, respectively

 

10

 

10

Additional paid-in capital 49,651 49,205 Accumulated earnings 122,516 120,939 Treasury stock – 412,133 shares, in both 2010 and 2009, at cost   (4,470 )     (4,470 ) Total stockholders’ equity   167,707       165,684   $ 270,837     $ 262,513