Second Quarter Revenue Increases 9% Year-over-Year to $115.5 Million
Second Quarter Adjusted EBITDA (1) Increases 20% Year-over-Year to $12.0
Million
Second Quarter Net Loss Improves 91% Year-over-Year to $(0.6) Million
Expects Third Quarter Revenue of $142.0 - $147.0 Million and Adjusted
EBITDA(1) of $16.5 - $17.5 Million
BLUE BELL, Pa., Aug. 8, 2012 (GLOBE NEWSWIRE) -- UniTek Global Services, Inc. ("UniTek" or the "Company") (UNTK), a premier provider of permanently outsourced infrastructure services to the telecommunications, broadband cable, wireless, transportation, public safety and satellite television industries, today announced financial results for the second quarter ended June 30, 2012, provided financial guidance for the third quarter of 2012 and reaffirmed full year guidance.
2012 Second Quarter Financial and Recent Business Highlights
-- Revenue grew 9% to $115.5 million, compared to $106.0 million in the
second quarter of 2011.
-- Adjusted EBITDA(1) increased by 20% to $12.0 million, compared to
adjusted EBITDA(1) of $10.0 million in the second quarter of 2011.
-- Net loss improved to $(0.6) million in the second quarter of 2012,
compared to $(6.4) million in the second quarter of 2011, which included
a $(3.5) million expense related to the April 2011 debt refinancing.
-- Appointed Rocky Romanella as Chief Executive Officer, bringing over
three decades of leadership experience in the business services industry
including demonstrated successes in operational execution, customer
solutions and overall business growth.
-- 12-month backlog (2) as of June 30, 2012 totaled $503.0 million, an
increase of $18.0 million over 12-month backlog (2) as of March 31,
2012.
-- Awarded incremental turf in upstate New York from a major wireless
carrier in the second quarter, adding to Company’s 12-month backlog and
supporting 2013 growth expectations.
-- Awarded additional territories from ViaSat for fulfillment related to
satellite internet service.
-- Introduced third quarter 2012 guidance of between $142.0 and $147.0
million in revenue, representing 18% to 22% year-over-year growth, and
between $16.5 and $17.5 million in adjusted EBITDA(1), representing 17%
to 24% year-over-year growth.
"UniTek’s strong second quarter performance and outlook for the year underscore the quality of our management team and the commitment to excellence throughout the organization," said Rocky Romanella, Chief Executive Officer of UniTek. "A balanced leadership team that is customer-focused, combined with a sound growth strategy, are important assets that set UniTek apart. We believe that continuing our focus on operational efficiency, safety as a core value and expanding our business to capture growing market opportunities will be instrumental to our continued success."
Ronald J. Lejman, Chief Financial Officer of UniTek, added, "The second quarter results represent consistent revenue growth and even further improvements in profitability as we enter the seasonally strong second half of the year. We made investments in people, systems and processes in our wireless business during the first half of the year that support our expectations for substantive revenue and profitability growth in the second half of 2012. We increased our 12-month backlog by $18 million in the second quarter through the expansion of existing contracts and an incremental turf award from our largest wireless customer. We are confident we will meet our objectives for the balance of 2012 and believe that we are well positioned for double digit growth in the years to come. Additionally, we remain focused on lowering our debt leverage ratios and improving our overall capital structure."
Financial Results for the Three Months Ended June 30, 2012
Revenue increased 9% to $115.5 million for the quarter ended June 30, 2012, from $106.0 million in the quarter ended July 2, 2011. This increase in revenue resulted primarily from organic growth in our wireless business and the growth in our cable business from market share gains and the acquisitions completed earlier in 2012.
Adjusted EBITDA(1) increased 20% to $12.0 million for the quarter ended June 30, 2012, compared to $10.0 million for the second quarter of 2011. The year-over-year increase in adjusted EBITDA(1) was primarily related to higher revenue and lower selling, general and administrative costs ("SG&A"), partially offset by mix of work and infrastructure investments for wireless growth. The Company expects margins to improve in the second half of 2012 as revenue growth creates improved operating leverage.
Net loss was $(0.6) million for the quarter ended June 30, 2012, compared to a net loss of $(6.4) million in the second quarter of 2011. The year-over-year improvement in net loss was primarily the result of the $2.0 million increase in adjusted EBITDA(1) and the $3.5 million loss on extinguishment of debt incurred in the second quarter of 2011 related to the debt refinancing completed on April 15, 2011. Net income after certain non-cash adjustments(3) for the second quarter of 2012 was $3.4 million, reflecting non-cash stock-based compensation of $1.0 million, non-cash interest expense of $0.3 million and non-cash amortization expense of $2.6 million.
UniTek’s 12-month backlog(2) totaled $503.0 million as of June 30, 2012, an increase of $18.0 million over 12-month backlog(2) as of March 31, 2012.
Financial Results for the Six Months Ended June 30, 2012
Revenue increased 14% to $223.8 million for the six months ended June 30, 2012, from $197.0 million for the six months ended July 2, 2011. This increase in revenue resulted primarily from organic growth in our wireless business, the acquisition of Pinnacle Wireless and the growth in our cable business from market share gains and the acquisitions completed earlier in 2012.
Adjusted EBITDA(1) increased 18% to $19.0 million for the six months ended June 30, 2012, compared to $16.2 million for the six months ended July 2, 2011. The year-over-year increase in adjusted EBITDA(1) was primarily related to revenue growth and lower SG&A costs, partially offset by mix of work and infrastructure investments for wireless growth.
Net loss was $(10.4) million for the six months ended June 30, 2012, compared with a net loss of $(14.2) million for the six months ended July 2, 2011. The year-over-year improvement in net loss was primarily the result of the $2.8 million higher adjusted EBITDA(1), $3.5 million loss on extinguishment of debt incurred in the second quarter of 2011 related to the debt refinancing completed on April 15, 2011, $1.3 million in lower interest expense, $1.0 million in additional other income primarily from the sale of assets and $0.5 million in lower stock-based compensation expense. These items were partially offset by the $5.1 million of restructuring charges in the current period for the management changes previously announced. Net loss after certain non-cash adjustments(3) for the six months ended June 30, 2012 was $(1.6) million, reflecting non-cash stock-based compensation of $3.0 million, non-cash interest expense of $0.7 million and non-cash amortization expense of $5.1 million.
Fiscal 2012 and Third Quarter 2012 Financial Guidance
Based on current expectations for growth in UniTek’s primary end markets, the Company is maintaining its expectations for full-year 2012 revenue of approximately $500.0 million, representing growth of 16% over 2011. Factoring in the same expectations, adjusted EBITDA(1) for 2012 is expected to be approximately $50.0 million, with earnings per share expected to be approximately $(0.14) and net income after certain non-cash adjustments(3) projected to be $0.70 per share.
For the third quarter of 2012, the Company currently expects revenue of between $142.0 and $147.0 million, with adjusted EBITDA(1) of between $16.5 and $17.5 million.
Conference Call
Management will host a conference call to review the Company’s financial results at 8:30 a.m. Eastern time, on Thursday, August 9, 2012. Interested parties may access the call by calling 1-877-674-6428 from within the United States, or 1-708-290-1372 if calling internationally. The passcode for the call is 15180568. Please dial-in approximately five minutes prior to the start of the call. A replay will be available through August 23, 2012 and can be accessed by dialing 1-800-585-8367 (U.S.), or 1-404-537-3406 (international), and entering access ID number 15180568.
The call will be also be available as a live, listen-only webcast under the "Events and Presentations" page on the "Investor Relations" Section of the Company’s website at http://ir.unitekglobalservices.com/events.cfm. Following the live event, an online archive will be available for 90 days.
About UniTek Global Services
UniTek Global Services is a provider of engineering, construction management and installation fulfillment services to companies specializing in the telecommunications, broadband cable, wireless, two-way radio, transportation, public safety and satellite industries. UniTek has created a scalable operating platform, enabling each UniTek subsidiary to deliver quality services to its Fortune 200 customers. www.unitekgs.com.
Forward-Looking Statements
The statements in this press release that are not historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts, including but not limited to statements regarding the impact of changes in the Company’s revenue mix, the Company’s expected backlog completion, the expected completion of acquisitions and financing arrangements and the Company’s expectations for its business units in fiscal year 2012. These statements are subject to uncertainties and risks including, but not limited to, operating performance, general financial, economic, and political conditions affecting the Company’s business and its target industries, the ability of the Company to perform its obligations under its contracts and agreements with customers and other risks contained in reports filed by the Company with the Securities and Exchange Commission, including in our Form 10-K for the year ended December 31, 2011. The words "may," "could," "should," "would," "believe," "are confident," "anticipate," "estimate," "expect," "expectations," "intend," "plan," and similar expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward looking statement, whether written or oral, which may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.
Footnotes:
(1) Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a key indicator used by our management to evaluate operating performance of the Company. While adjusted EBITDA is not intended to replace any presentation included in the Company’s consolidated financial statements under generally accepted accounting principles (or GAAP) and should not be considered an alternative to operating performance, we believe this measure is useful to investors in assessing our performance with other companies in our industry. This calculation may differ in method of calculation from similarly titled measures used by other companies.
(2) Our 12-month backlog consists of uncompleted portions of services to be performed under job-specific contracts and the estimated value of future services that we expect to provide under master service agreements and other long-term contracts. Many of our contracts are multi-year agreements. We include in our backlog the amount of services projected to be performed over the terms of the contracts, where applicable, or based on our historical experience with customers and our experience in procurements of this type.
(3) Net income (loss) after certain non-cash adjustments is a key indicator used by our management to evaluate operating performance of the Company. While the net income (loss) after certain non-cash adjustments is not intended to replace any presentation included in the Company’s consolidated financial statements under generally accepted accounting principles, or GAAP, and should not be considered an alternative to operating performance, we believe this measure is useful to investors in assessing our performance in comparison with other companies in our industry. Specifically, (i) non-cash compensation expense may vary due to factors influencing the estimated fair value of performance based rewards, estimated forfeiture rates and amounts granted, (ii) non-cash interest expense varies depending on the timing of amendments to the Company’s debt and changes to the debt structure and (iii) amortization of intangible assets is impacted by the Company’s acquisition strategy and timing of acquisitions.
UNITEK GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December
June 30, 31,
2012 2011
--------- ---------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ 95
Restricted cash 25 68
Accounts receivable and
unbilled revenue, net of
allowances 104,748 91,533
Inventories 10,059 10,985
Prepaid expenses and other
current assets 6,598 3,299
--------- ---------
Total current assets 121,430 105,980
Property and equipment, net 36,733 39,022
Amortizable customer
relationships, net 25,889 29,783
Other amortizable
intangible assets, net 4,104 4,635
Goodwill 166,053 163,797
Deferred tax assets, net 958 568
Other assets 5,371 5,095
--------- ---------
Total assets $ 360,538 $ 348,880
========= =========
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable $ 36,539 $ 33,367
Accrued liabilities 38,165 32,597
Contingent consideration 84 26,958
Current portion of
long-term debt 1,500 1,000
Current income taxes 119 904
Current portion of capital
lease obligations 10,142 9,631
Other current liabilities 509 518
--------- ---------
Total current liabilities 87,058 104,975
Long-term debt, net of
current portion 142,350 111,217
Long-term capital lease
obligations, net of
current portion 13,358 16,283
Deferred income taxes 7,511 5,511
Other long-term liabilities 1,441 1,664
--------- ---------
Total liabilities 251,718 239,650
STOCKHOLDERS’ EQUITY
Preferred Stock -- --
Common Stock -- --
Additional paid-in capital 259,691 249,745
Accumulated other
comprehensive income 59 18
Accumulated deficit (150,930) (140,533)
--------- ---------
Total stockholders’
equity 108,820 109,230
--------- ---------
Total liabilities and
stockholders’ equity $ 360,538 $ 348,880
========= =========
UNITEK GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OR LOSS
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
-------------------- ----------------------
June 30, July 2, June 30, July 2,
2012 2011 2012 2011
--------- --------- ---------- ----------
Revenues $ 115,533 $ 105,959 $ 223,760 $ 197,042
Cost of revenues 94,306 84,357 184,569 160,906
--------- --------- ---------- ----------
Gross profit 21,227 21,602 39,191 36,136
Selling, general and
administrative expenses 10,271 13,078 23,330 23,949
Change in fair value of
contingent consideration (400) -- (724) --
Restructuring charges 797 -- 5,085 --
Depreciation and
amortization 7,333 7,117 14,290 13,447
--------- --------- ---------- ----------
Operating income (loss) 3,226 1,407 (2,790) (1,260)
Interest expense 3,662 3,486 6,684 7,959
Loss on extinguishment of
debt -- 3,466 -- 3,466
Other income, net (909) (112) (1,138) (141)
--------- --------- ---------- ----------
Income (loss) from
continuing operations
before income taxes 473 (5,433) (8,336) (12,544)
Income tax expense 909 889 1,584 1,401
--------- --------- ---------- ----------
Loss from continuing
operations (436) (6,322) (9,920) (13,945)
Loss from discontinued
operations (131) (43) (477) (294)
--------- --------- ---------- ----------
Net loss $ (567) $ (6,365) $ (10,397) $ (14,239)
--------- --------- ---------- ----------
Net loss per share --
basic and diluted:
Continuing operations $ (0.02) $ (0.40) $ (0.56) $ (0.89)
Discontinued operations (0.01) -- (0.03) (0.02)
--------- --------- ---------- ----------
Net loss $ (0.03) $ (0.40) $ (0.59) $ (0.91)
========= ========= ========== ==========
Weighted average shares of
common stock outstanding:
Basic and diluted 18,629 16,019 17,587 15,584
Comprehensive loss $ (567) $ (6,360) $ (10,356) $ (14,173)
========= ========= ========== ==========
UNITEK GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF NET LOSS TO ADJUSTED EBITDA
(Amounts in thousands)
(unaudited)
Three Months Ended Six Months Ended
------------------- ----------------------
June 30, July 2, June 30, July 2,
2012 2011 2012 2011
-------- --------- ---------- ----------
Net loss $ (567) $ (6,365) $ (10,397) $ (14,239)
Non-cash stock based
compensation 982 1,078 3,047 3,589
Loss on extinguishment of
debt -- 3,466 -- 3,466
Non-cash interest expense 337 376 663 1,285
Non-cash amortization 2,607 3,321 5,116 6,130
-------- --------- ---------- ----------
Net income (loss) after
certain non-cash
adjustments $ 3,359 $ 1,876 $ (1,571) $ 231
Loss from discontinued
operations 131 43 477 294
Income tax expense 909 889 1,584 1,401
Restructuring charges 797 -- 5,085 --
Change in fair value (400) -- (724) --
Cash interest expense 3,325 3,110 6,021 6,674
Other income (909) (112) (1,138) (141)
Depreciation 4,726 3,796 9,174 7,317
Transaction costs 57 415 124 416
-------- --------- ---------- ----------
Adjusted EBITDA $ 11,995 $ 10,017 $ 19,032 $ 16,192
======== ========= ========== ==========
UNITEK GLOBAL SERVICES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF PROJECTED NET INCOME (LOSS) TO PROJECTED
ADJUSTED EBITDA
(Amounts in thousands, except per share amounts)
(unaudited)
Year
Three Months Ending
Ending December
Sept. 29, 2012 31, 2012
------------------ --------
Low High
Estimate Estimate Estimate
-------- -------- --------
Revenue $142,000 $147,000 $500,000
Adjusted EBITDA reconciliation:
Net income (loss) $3,550 $4,350 $(3,050)
Non-cash stock based
compensation 700 700 4,350
Non-cash interest expense 300 300 1,250
Non-cash amortization 2,550 2,550 10,100
-------- -------- --------
Net income after certain
non-cash adjustments $7,100 $7,900 $12,650
-------- -------- --------
Income tax expense 1,000 1,000 3,650
Cash interest expense 3,400 3,600 12,450
Restructuring expense 800 800 5,800
Depreciation 4,600 4,600 18,000
Other (1) (400) (400) (2,550)
-------- -------- --------
Adjusted EBITDA $16,500 $17,500 $50,000
======== ======== ========
Earnings per share - basic:
Net income (loss) per share
-- continuing operations $0.19 $0.23 $(0.14)
======== ======== ========
Net income after certain
non-cash adjustments per
share $0.38 $0.42 $0.70
======== ======== ========
Weighted average shares of
common stock outstanding 18,724 18,724 18,168
======== ======== ========
(1) Other includes the net of discontinued operations, change
in fair value of contingent consideration, transaction costs
and other income.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: UniTek Global Services
CONTACT: The Piacente Group | Investor Relations
Lee Roth
(212) 481-2050
unitek@tpg-ir.com
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