The Keith Companies Reports Year End Results With Year Over Year
Increases in The Fourth Quarter IRVINE, Calif., Feb. 12
/PRNewswire-FirstCall/ -- The Keith Companies, Inc. , an
engineering and consulting services firm, today announced financial
results for the fourth quarter and year ended December 31, 2003.
Net revenue for the three months ended December 31, 2003 increased
1.9% to $22.8 million, while income from continuing operations for
the same period increased to $1.9 million and resulted in diluted
earnings per share from continuing operations of $0.24. This
compares to net revenue for the fourth quarter of 2002 of $22.3
million with income from continuing operations of $1.8 million and
diluted earnings per share from continuing operations of $0.23. "We
are very pleased with our year over year growth for the fourth
quarter, which was driven by increasing demand for our residential
real estate services in both Northern and Southern California,"
said Aram Keith, Chairman and CEO of TheKeith Companies. "In the
fourth quarter, our real estate services generated organic net
revenue growth of approximately 10.6%. The net revenue growth in
this area was offset by continued weakness in the energy/industrial
segment, although we continueto be encouraged by the increased
level of interest for significant projects in this area in the
future." Net revenue for the twelve months ended December 31, 2003
decreased 0.9% to $90.7 million, from $91.6 million for the twelve
months ended December 31, 2002. Income from continuing operations
for the twelve months ended December 31, 2003 decreased to $7.2
million, and resulted in diluted earnings per share from continuing
operations of $0.91 compared to $8.4 million or diluted earnings
per share from continuing operations of $1.07 for the twelve months
ended December 31, 2002. Two notable items impacted the previous
year's results. Interest expense and other income during 2002 was
positively impacted by $498,000 (net of income taxes) of purchase
price adjustments associated with the Company's acquisitions of
Crosby, Mead, Benton & Associates and Hook & Associates
Engineering, Inc. Other income in the fourth quarter of 2003 was
positively impacted by a $45,000 (net of income taxes) purchase
price adjustment associated with the Company's acquisition of ALNM
Group, Inc. Financial Position The Company's December 31, 2003
balance sheet remains strong with cash and securities of $28.9
million, a current ratio of 4.7:1, a debt to equity ratio of 0.00:1
(excluding issuable common stock) and shareholders' equity of $72.0
million or $9.40 per common share outstanding at December 31, 2003.
Financial Guidance In adherence with the U.S. Securities and
Exchange Commission's (SEC) Regulation Fair Disclosure, The Keith
Companies provides the following guidance for all investors and
encourages all current and potential investors to review the
disclosure regarding forward-looking statements in this press
release as well as all financial documents filed with the SEC. All
guidance amounts are before special items, if any, and exclude the
impact of any potential future acquisitions. The Company's
financial guidance for 2004 remains unchanged from the guidance
previously provided. The Company estimates its full year 2004 net
revenue may range from $90.0 million to $100.0 million with
estimated diluted earnings per share ranging from $0.88 to $1.04
($0.19 to $0.22 for the first quarter; $0.22 to $0.26 for the
second quarter; $0.26 to $0.31 for the third quarter; and $0.21 to
$0.25 for the fourth quarter) based upon an estimated 8.1 million
weighted average number of diluted shares outstanding for the year.
The higher range of the guidance is primarily based upon
significant improvements in the demand for services in the
Company's energy/industrial segment. "Our position as one of the
leading residential real estate engineering firms in California
provides excellent opportunities in a rapidly growing market," said
Keith. "Overall, the beginningof an economic recovery,
infrastructure deficiencies, overdue capital spending and
legislative enticements, lead us to believe that the energy and
industrial markets will begin to experience growth in the not too
distant future. In addition to our planned organic growth, we are
encouraged by the prospects for generating incremental growth
through the acquisition of complementary firms that can expand our
service offerings or enable us to achieve better penetration in
attractive markets. We are in various stages of performing due
diligence on a number of acquisition candidates. Following our due
diligence review, if we believe that the acquisition of any of
these candidates would enhance shareholder value, we intend to
negotiate definitive purchase agreements to acquire those
candidates to drive additional growth in future years." Conference
call to be broadcast live over the Internet The Company will be
hosting an earnings conference call, which will be broadcast live
over the Internet at 8:30 a.m. Pacific Time on February 12, 2004
and can be accessed by all interested parties at
http://www.viavid.net/ . To listen to the live call, please go to
the Web site at least fifteen minutes prior to the start of the
call to register, download, and install any necessary audio
software. For those unable to participate during the live
broadcast, a replay will be available shortly after the call. A
copy of this press release and a link to the Company's quarterly
conference call will be available atthe Company's website under the
headings "TKC News" and "Investor Relations," respectively, at
http://www.keithco.com/ . About The Keith Companies The Keith
Companies, Inc. is a fully integrated, multi-disciplined
engineering and consulting services company, with offices located
throughout the Western and Midwestern United States. The Keith
Companies' professionals provide a wide spectrum of skilled
resources including land planning, engineering, surveying, mapping,
environmental studies, and water and cultural resources that are
needed to effectively plan, engineer, and design state-of- the-art
private and public facilities. Additionally, the Company provides
mechanical, electrical, chemical, power/energy engineering, and
other industrial engineering services to design and improve the
efficiency and reliability of automated and manufacturing
processes, production lines, and fire protection systems. The Keith
Companies benefits from a diverse public and private client base
varying from residential and commercial real estate projects to
institutional, manufacturing, and processing facilities. For more
information visit the Company's website at http://www.keithco.com/
. Certain statements in this news release may include
forward-looking statements that express our expectation,
prediction, belief, or projection. These statements involve known
and unknown risks, uncertainties, and other factors that may cause
the actual results, performance, and achievement of The Keith
Companies to be materially and adversely different from any future
results, performance, or achievement expressed or implied by these
forward- looking statements. Factors that may cause actual results
to differ from the forward-looking statements contained in this
release and that may affect the Company's prospects in general
include, but are not limited to: changes in the economic growth in
the United States (especially in California) and other major
international economies (especially Brazil), our ability to sustain
our growth and profitability, our ability to implement our
acquisition strategy and to successfully close and integrate
acquired companies on a timely and cost-effective basis, changes in
the carrying value of our goodwill and other long-term assets, our
failure to accurately estimate costs on fixed-price contracts or
contracts with not-to-exceed provisions, the uncertain timing of
awards and contracts, the ability to maintain acquired companies'
profit margins and/or client base, outcomes of pendingand future
litigation, the ongoing financing of public works and
infrastructure enhancements and refurbishment, our ability to
attract and retain employees, the demand for electricity and the
impact on power providers' plans for expanding generation
facilities, increasing competition by foreign and domestic
companies, a downturn in the real estate market, risks inherent in
doing business outside the United States, including the difficulty
of enforcing contracts, political instability and foreign currency
fluctuations and potential exchange restrictions, the short- and
long-term impact of terrorist activities and resulting political
and military policies, and other factors as are described in the
Company's filings with the Securities and Exchange Commission. The
forward-looking information set forth in this press release is as
of the date indicated above and we undertake no duty to update this
information. For further information, please contact: Aram Keith,
Chairman of the Board & CEO of The Keith Companies, Inc.,
+1-949-923-6001, or Fax, +1-949-923-6026; or Investor Relations,
Tricia Ross of Financial Relations Board, +1-310-407-6540. TABLES
FOLLOW The Keith Companies, Inc. and Subsidiaries Consolidated
Statements of Income Three Months Ended Years Ended December 31,
December 31, 2003 2002 2003 2002 (Unaudited) Gross revenue
$25,031,000 $24,657,000 $99,950,000 $106,487,000 Subcontractor
costs 2,264,000 2,323,000 9,206,000 14,889,000 Net revenue
22,767,000 22,334,000 90,744,000 91,598,000 Costs of revenue
14,537,000 14,597,000 58,837,000 59,716,000 Gross profit 8,230,000
7,737,000 31,907,000 31,882,000 Selling, general and administrative
expenses 5,271,000 4,859,000 20,592,000 19,105,000 Income from
operations 2,959,000 2,878,000 11,315,000 12,777,000 Interest
income, net 69,000 79,000 264,000 431,000 Other (income) expenses,
net (71,000) 11,000 (259,000) (625,000) Income before provision for
income taxes and discontinued operations 3,099,000 2,946,000
11,838,000 13,833,000 Provision for income taxes 1,208,000
1,149,000 4,617,000 5,397,000 Income from continuing operations
1,891,000 1,797,000 7,221,000 8,436,000 Loss from discontinued
operations, net of income taxes -- 97,000 -- 628,000 Net income
$1,891,000 $1,700,000 $7,221,000 $7,808,000 Earnings per share from
continuing operations: Basic $0.25 $0.24 $0.95 $1.15 Diluted $0.24
$0.23 $0.91 $1.07 Loss per share from discontinued operations, net
of income taxes: Basic $-- $(0.01) $-- $(0.09) Diluted $-- $(0.01)
$-- $(0.08) Earnings per share: Basic $0.25 $0.23 $0.95 $1.06
Diluted $0.24 $0.22 $0.91 $0.99 Weighted average number of shares
outstanding: Basic 7,637,880 7,470,448 7,615,264 7,363,073 Diluted
7,963,622 7,858,738 7,957,344 7,868,877 The Keith Companies, Inc.
and Subsidiaries Consolidated Balance Sheets December 31, December
31, 2003 2002 Assets Current assets: Cash and cash equivalents
$24,277,000 $20,333,000 Securities held-to-maturity 4,600,000
3,164,000 Contracts and trade receivables, net 19,844,000
18,771,000 Costs and estimated earnings in excess of billings
9,997,000 10,392,000 Prepaid expenses and other current assets
1,468,000 1,367,000 Total current assets 60,186,000 54,027,000
Equipment and leasehold improvements, net 4,067,000 4,831,000
Goodwill, net 23,059,000 23,056,000 Other assets 224,000 312,000
Total assets $87,536,000 $82,226,000 Liabilities and Shareholders'
Equity Current liabilities: Current portion of capital lease
obligations $-- $52,000 Trade accounts payable 1,640,000 1,818,000
Accrued employee compensation 4,037,000 3,722,000 Current portion
of deferred tax liabilities 2,444,000 3,065,000 Other accrued
liabilities 3,078,000 4,484,000 Billings in excess of costs and
estimated earnings 1,571,000 1,273,000 Total current liabilities
12,770,000 14,414,000 Capital lease obligations, less current
portion -- 18,000 Issuable common stock 792,000 2,215,000 Deferred
tax liabilities 1,560,000 1,675,000 Accrued rent 452,000 292,000
Total liabilities 15,574,000 18,614,000 Shareholders' equity:
Preferred stock -- -- Common stock 8,000 8,000 Additional
paid-in-capital 45,295,000 44,166,000 Retained earnings 26,659,000
19,438,000 Total shareholders' equity 71,962,000 63,612,000 Total
liabilities and shareholders' equity $87,536,000 $82,226,000 The
Keith Companies Inc. and Subsidiaries Consolidated Statements of
Cash Flows For the Year Ended December 31, 2003 2002 Cash flows
from operating activities: Net income $7,221,000 $7,808,000
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 2,231,000
2,283,000 Loss on sale/impairment of equipment 29,000 93,000
Reduction in purchase price of acquired companies (137,000)
(769,000) Tax benefit from exercise of stock options 69,000 89,000
Stock compensation expense 37,000 -- Changes in operating assets
and liabilities, net of effects from acquisition in 2002: Contracts
and trade receivables, net (1,269,000) 3,369,000 Costs and
estimated earnings in excess of billings 304,000 (1,545,000)
Prepaid expenses and other assets (53,000) 108,000 Trade accounts
payable and accrued liabilities (652,000) (270,000) Billings in
excess of costs and estimated earnings 298,000 (1,042,000) Deferred
tax liabilities (728,000) (28,000) Net cash provided by operating
activities $7,350,000 $10,096,000 Cash flows from investing
activities: Net cash expended related to or for acquisitions
(722,000) (8,048,000) Additions to equipment and leasehold
improvements (1,548,000) (1,872,000) Proceeds from (purchases of)
securities held-to-maturity (1,436,000) 8,357,000 Proceeds from
sales of equipment 57,000 134,000 Net cash used in investing
activities$(3,649,000) $(1,429,000) Cash flow from financing
activities: Principal payments on long-term debt and capital lease
obligations, including current portion (52,000) (705,000) Proceeds
from exercise of stock options 295,000 159,000 Net cash provided by
(used in) financing activities $243,000 $(546,000) Net increase in
cash and cash equivalents 3,944,000 8,121,000 Cash and cash
equivalents, beginning of period $20,333,000 $12,212,000 Cash and
cash equivalents, end of period $24,277,000 $20,333,000
DATASOURCE:The Keith Companies, Inc. CONTACT: Aram Keith, Chairman
of the Board & CEO of The Keith Companies, Inc.,
+1-949-923-6001, or Fax, +1-949-923-6026; or Investor Relations,
Tricia Ross of Financial Relations Board, +1-310-407-6540 Web site:
http://www.keithco.com/
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