Schuff International, Inc. (Pink Sheets: SHFK), a family
of companies providing fully integrated steel construction
services, today reported financial and operating results for the
second quarter ended July 4, 2010.
Second Quarter 2010 Results:
Revenues for the second quarter ended July 4, 2010 were $66.5
million, a decrease of 35.9 percent from year-ago revenues of
$103.7 million.
Gross profit as a percentage of revenue was 15.6 percent for the
second quarter ended July 4, 2010, compared with 24.5 percent for
the second quarter ended July 5, 2009.
Operating income for the second quarter of 2010 was $1.3
million, down 91.6 percent from $13.3 million in the year-ago
quarter. Operating margin decreased to 1.9 percent from 12.8
percent in the year-ago period, due primarily to lower revenues
earned during the quarter.
Net income for the quarter was $0.7 million, or $0.07 per
diluted share, versus $8.0 million, or $0.86 per diluted share, a
year ago.
Schuff International’s backlog was $165.4 million ($150.1
million under contracts or purchase orders and $15.4 million under
letters of intent) at July 4, 2010 compared with $184.1 million
($147.3 million under contracts or purchase orders and $36.8
million under letters of intent) at April 4, 2010. Approximately
$53.7 million, representing 32.5 percent of the company’s backlog
at July 4, 2010, was attributable to five contracts, letters of
intent, notices to proceed or purchase orders.
Six Months 2010 Results:
Revenues for the six months ended July 4, 2010 were $148.5
million, a decrease of 36.2 percent from year-ago revenues of
$232.9 million. The year-over-year revenue decrease resulted
primarily from the overall downturn in commercial construction.
Gross profit as a percentage of revenue was 15.6 percent for the
six months ended July 4, 2010, compared with 23.3 percent for the
year-ago period.
Operating income for the first six months of 2010 was $4.0
million, down 86.2 percent from $29.3 million for the first six
months of 2009. Operating margin decreased to 2.7 percent from 12.6
percent in the year-ago period.
Net income for the six months ended July 4, 2010 was $2.2
million, or $0.23 per diluted share, versus $17.6 million, or $1.89
per diluted share, a year ago.
“Our core markets and customers continue to be battered by the
recession,” said Scott A. Schuff, president and CEO. “We expect the
second half of 2010 to present a continuing challenge for our
business. Competition for the work that is available remains tough,
and we expect gross margins on smaller projects to be under
pressure for the remainder of the year.
“However, our financial position is strong and has not limited
our ability to pursue new awards, or to execute projects to the
highest standards of effectiveness and safety. We believe our
long-term growth strategy and cost structure position us to
capitalize on opportunities emerging as our core markets improve.
Even now, we are encouraged by relative strength in new hospital
construction and overall growth in healthcare-related building
activity,” 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.
Financial tables follow.
SCHUFF INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED) Three
months ended Six months ended July 4 July
5 July 4 July 5 2010
2009 2010
2009 (in thousands, except per share data)
Revenues $ 66,528 $ 103,730 $ 148,516 $ 232,923 Cost of
revenues 56,156 78,332
125,372 178,711 Gross profit
10,372 25,398 23,144 54,212 General and administrative expenses
9,114 12,078
19,097 24,866 Operating income 1,258
13,320 4,047 29,346 Interest expense (287 ) (1,011 ) (598 ) (2,084
) Other income 94 332
172 496 Income before income tax
provision 1,065 12,641 3,621 27,758 Income tax provision 407
4,662 1,386
10,206 Net income $ 658 $ 7,979
$ 2,235 $ 17,552 Income per
common share: Basic $ 0.07 $ 1.13 $
0.23 $ 2.48 Diluted $ 0.07 $
0.86 $ 0.23 $ 1.89
Weighted average shares used in computation: Basic 9,658
7,077 9,657
7,079 Diluted 9,707 9,638
9,706 9,651
SCHUFF INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS
(UNAUDITED) July 4 January 3
2010 2010 (in thousands,
except for share data)
Assets Current assets Cash and cash
equivalents $ 66,391 $ 47,618 Receivables 73,110 93,239 Income tax
receivable 472 1,554 Costs and recognized earnings in excess of
billings on uncompleted contracts 9,166 7,966 Inventories 15,265
15,915 Deferred tax asset 2,775 2,775 Prepaid expenses and other
current assets 634 1,263 Total
current assets 167,813 170,330 Property, plant and
equipment, net 72,421 71,406 Goodwill 17,115 17,115 Other assets
3,855 3,662 $ 261,204
$ 262,513
Liabilities and stockholders' equity
Current liabilities Accounts payable $ 16,068 $ 18,723 Accrued
payroll and employee benefits 9,077 8,165 Accrued interest 4 84
Other current liabilities 8,811 6,823 Billings in excess of costs
and recognized earnings on uncompleted contracts 42,759 43,571
Current portion of long-term debt 3,109
3,470 Total current liabilities 79,828 80,836
Long-term debt 7,431 10,493 Deferred tax liability 5,226 5,226
Other liabilities 252 274
12,909 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 9,708,952 and 9,655,645 shares outstanding in FY2010
and FY2009, respectively
10 10 Additional paid-in capital 49,236 49,205 Retained earnings
123,174 120,939
Treasury stock - 329,105 and
381,912 shares in FY2010 and FY2009, respectively, at cost
(3,953 ) (4,470 ) Total stockholders' equity
168,467 165,684 $ 261,204
$ 262,513
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