URS Corp. quarterly results up 8%
Results in line with guidance, including previously announced charge related to note redemptions. Debt-to-capitalization ratio reduced to 35%...
SAN FRANCISCO, Sept. 9, 2004 (BUSINESS WIRE) URS Corp. reported revenues of $838.2 million for the third quarter of fiscal 2004, an increase of 8% from $778.0 million in revenues reported for the third quarter of fiscal 2003. Net income was $7.3 million, compared to $17.1 million reported for the corresponding third quarter of fiscal 2003.
Net income for the third quarter of fiscal 2004 includes a previously announced pre-tax charge of $27.4 million, equivalent to a $0.37 per share reduction in our earnings per share (EPS), related to the company's recent public offering of 8.1 million shares of common stock and note redemptions of $250.0 million. The charge consists of cash payments of $19.1 million for call premiums and a non-cash charge of $8.3 million for prepaid financing fees, issuance costs and debt discounts.
Diluted EPS for the third quarter of fiscal 2004 were $0.17 after the $0.37 per share charge described above. This compares to diluted EPS of $0.52 per share for the same period last year. Weighted-average shares outstanding for the third quarter of fiscal 2004 for the purposes of calculating diluted EPS were 44.2 million compared to 33.2 million weighted-average shares outstanding for the third quarter of fiscal 2003. The increase is due primarily to the company's public common stock offering and to additional shares issued pursuant to the company's stock option and purchase plans.
For the nine months ended July 31, 2004, the company generated operating cash flow of $87.1 million, and repaid $59.5 million in debt. In addition, the company used $185.2 million from its public stock offering to further repay debt. As a result, the company's debt to total capitalization ratio improved to 35% at July 31, 2004, from 52% at Oct. 31, 2003.
As of July 31, 2004, the company's backlog was $3.692 billion, compared to $3.662 billion as of October 31, 2003.
Commenting on URS's financial results, Martin M. Koffel, chairman and CEO, stated: "Our results for the quarter reflect strong performance by our federal sector business, tempered by continued softness in the state and local government and private sector markets. Our federal sector business has benefited from increased demand from the Department of Defense for equipment repair and maintenance services, as well as continuing strength in our work on technical support services and facilities and environmental projects. Overall revenues from both the state and local government and private sectors, however, were slightly lower than expected, even as we continue to see indications that portions of these markets have begun to recover. As these markets recover, our diversified business portfolio and strong relationships with key clients across the country continue to result in important new assignments for URS."
For the nine months ended July 31, 2004, revenues increased 5% to $2.475 billion, from $2.349 billion for the same period last year. Net income for the nine months ended July 31, 2004 was $35.6 million, or $0.91 per share fully diluted, compared to $38.6 million, or $1.18 per share fully diluted, for the same period last year. Weighted-average shares outstanding for the first nine months of fiscal 2004 for the purposes of calculating diluted EPS were 38.9 million compared to 32.7 million weighted-average shares outstanding for the same period last year.
Business Segments
In addition to providing consolidated financial results, URS provides separate financial information for its two segments: the URS Division and the EG&G Division. The URS Division includes the company's work in the state and local government market, the private sector and the international business. In addition, the URS Division includes the company's federal business that existed prior to the acquisition of EG&G, which consists primarily of facilities and environmental work. The EG&G Division primarily serves the federal government market, providing a range of operations and maintenance, and systems engineering and technical support services to the Departments of Defense, Homeland Security, Justice, Energy and Treasury, among others.
URS Division: For the third quarter of fiscal 2004, the URS Division reported revenues of $556.6 million and operating income of $45.0 million, compared to revenues of $557.1 million and operating income of $44.5 million for the corresponding third quarter of the 2003 fiscal year.
For the nine months ended July 31, 2004, the URS Division reported revenues of $1.665 billion and operating income of $121.7 million, compared to revenues of $1.672 billion and operating income of $120.2 million for the same period last year.
EG&G Division: For the third quarter of 2004, the EG&G Division reported revenues of $283.2 million and operating income of $16.5 million, compared to revenues of $220.9 million and operating income of $13.8 million for the corresponding third quarter of the 2003 fiscal year.
For the nine months ended July 31, 2004, the EG&G Division reported revenues of $811.9 million and operating income of $41.6 million, compared to revenues of $676.3 million and operating income of $34.5 million for the same period last year.
Outlook for Fiscal 2004
URS reaffirmed its expectation that fiscal 2004 revenues will be approximately $3.3 billion. The company also expects that its fiscal 2004 earnings per share would be $1.90, excluding the $0.37 per share charge related to the costs of the company's note redemptions.
On a GAAP basis, the company expects net income of approximately $61.8 million, or $1.53 per share, for fiscal 2004. A reconciliation between the $1.90 per share and the $1.53 per share, showing the effects of the stock offering and note redemptions, is attached to this release.
URS Corp. (www.urscorp.com) offers a comprehensive range of professional planning and design, systems engineering and technical assistance, program and construction management, and operations and maintenance services for surface transportation, air transportation, rail transportation, industrial process, facilities and logistics support, water/wastewater treatment, hazardous waste management and military platforms support. Headquartered in San Francisco, the company operates in over 20 countries with approximately 27,000 employees providing engineering and technical services to federal, state and local governmental agencies as well as private clients in the chemical, manufacturing, pharmaceutical, forest products, mining, oil and gas, and utilities industries.
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