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 second quarter ended July 3, 2011.

Second Quarter 2011 Results:

Revenues for the second quarter of 2011 were $89.8 million, an increase of 35.0 percent from revenues of $66.5 million for the second quarter of 2010.

Gross profit as a percentage of revenue was 9.2 percent for the second quarter of 2011, compared with 15.6 percent for the second quarter of 2010.

Operating loss for the second quarter of 2011 was $(0.7) million, compared with operating income of $1.3 million in the year-ago quarter. Operating margin was (0.8) percent compared with 1.9 percent in the year-ago period. The year-over-year decline in operating income and margin was attributable to lower gross margins on existing projects.

Net loss for the quarter was $(0.5) million, or $(0.05) per diluted share, versus net income of $0.7 million, or $0.07 per diluted share, a year ago.

Schuff International’s backlog was $257.0 million ($198.7 million under contracts or purchase orders and $58.3 million under letters of intent) at July 3, 2011 compared with $230.6 million ($204.9 million under contracts or purchase orders and $25.7 million under letters of intent) at April 3, 2011. Approximately $92.2 million, representing 35.9 percent of the company’s backlog at July 3, 2011, was attributable to five contracts, letters of intent, notices to proceed or purchase orders.

Six Months 2011 Results:

Revenues for the six months ended July 3, 2011 were $160.5 million, an increase of 8.1 percent from year-ago revenues of $148.5 million.

Gross profit as a percentage of revenue was 11.1 percent for the six months ended July 3, 2011, compared with 15.6 percent for the six months ended July 4, 2010.

Operating income for the first six months of 2011 was $(0.1) million, down 101.6 percent from $4.0 million for the first six months of 2010. Operating margin decreased to 0 percent from 2.7 percent in the year-ago period.

Net loss for the six months ended July 3, 2011 was $(0.21) million, or $(0.02) per diluted share, versus net income of $2.24 million, or $0.23 per diluted share, from the same period a year ago.

“Although we saw year-over-year quarterly revenue growth for the first time in several quarters, we’re still not seeing definitive signs of sustained recovery in our business,” said Scott A. Schuff, President and CEO. “Revenue growth in the second quarter came primarily from projects in the healthcare and transportation infrastructure sector for government customers that carried lower margins. We do expect margins to improve somewhat in the second half of 2011, but operating income as a percentage of revenue will remain considerably below historical averages until we see a rebound in the commercial construction industry.

“During the second quarter we announced the formation of Schuff Hopsa Engineering, a Panamanian joint venture focused on providing structural steel fabrication and erection services throughout Central and South America. The new company now owns and operates a 52,000 square-foot steel fabrication plant in Chilibre, just outside of Panama City. I’m pleased to report that Schuff Hopsa is already engaged in revenue-generating design-build projects related within Panama, as well as actively bidding several others throughout Central America,” added Schuff.

“Schuff continues to benefit from the financial discipline and cost controls we began to implement 18-plus months ago. We believe we’re well-positioned to capitalize on a recovery in commercial construction activity when it occurs, and we continue to seek to diversify our portfolio of projects to sustain us during this prolonged downturn,” Schuff concluded.

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 35-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 1,200 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 volatility of energy prices and its impact on related construction activity; the recovery of the commercial construction market; 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 (UNAUDITED)     Three months ended Six months ended July 3 July 4 July 3 July 4   2011       2010       2011       2010   (in thousands, except per share data)   Revenues $ 89,782 $ 66,528 $ 160,520 $ 148,516 Cost of revenues   81,502       56,156       142,739       125,372   Gross profit 8,280 10,372 17,781 23,144 General and administrative expenses   9,027       9,114       17,846       19,097   Operating income (747 ) 1,258 (65 ) 4,047 Interest expense (197 ) (287 ) (410 ) (598 ) Other (expense) income   69       94       100       172   Income before income tax provision (875 ) 1,065 (375 ) 3,621 Income tax provision   412       (407 )     170       (1,386 ) Net income $ (463 )   $ 658     $ (205 )   $ 2,235     Income per common share: Basic $ (0.05 )   $ 0.07     $ (0.02 )   $ 0.23   Diluted $ (0.05 )   $ 0.07     $ (0.02 )   $ 0.23     Weighted average shares used in computation: Basic   9,757       9,658       9,757       9,657   Diluted   9,760       9,707       9,760       9,706     See notes to consolidated financial statements.   SCHUFF INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS         July 3   January 2 2011   2011 (in thousands, except for share data) Assets Current assets Cash and cash equivalents $ 36,754 $ 48,003 Receivables 82,494 92,617 Income tax receivable - 1,295 Costs and recognized earnings in excess of billings on uncompleted contracts 20,533 7,869 Inventories 15,934 18,827 Deferred tax asset 1,910 1,910 Prepaid expenses and other current assets   909       1,613   Total current assets 158,534 172,134   Property, plant and equipment, net 74,444 74,042 Goodwill 17,115 17,115 Other assets   3,577       3,687   $ 253,670     $ 266,978   Liabilities and stockholders' equity Current liabilities Accounts payable $ 24,685 $ 23,757 Accrued payroll and employee benefits 8,311 6,406 Accrued interest 2 55 Other current liabilities 6,663 5,587 Billings in excess of costs and recognized earnings on uncompleted contracts 35,005 48,288 Income tax payable 88 - Current portion of long-term debt   1,220       2,025   Total current liabilities 75,974 86,118   Long-term debt 2,373 5,623 Deferred tax liability 7,001 7,001 Other liabilities   177       199     9,551       12,823     Stockholders' equity Preferred stock, $.001 par value – authorized 1,000,000 shares, none issued - - Common stock, $.001 par value – 20,000,000 shares authorized, 10,038,707 and 10,038,057 shares issued, and 9,756,605 and 9,655,645 shares outstanding in 2011 and 2010, respectively 10 10 Additional paid-in capital 49,514 49,199 Retained earnings 122,014 122,219 Treasury stock - 281,452 shares in both 2011 and 2010, at cost   (3,391 )     (3,391 ) Total stockholders' equity   168,147       168,037   $ 253,672     $ 266,978