PITTSBURGH, March 5 /PRNewswire-FirstCall/ -- Mastech Holdings,
Inc., (NYSE Alternext US: MHH), a national provider of Information
Technology staffing services, today announced its financial results
for the fourth quarter and year ended December 31, 2008. (Logo:
http://www.newscom.com/cgi-bin/prnh/20080508/NETH059LOGO-b ) Fourth
Quarter Results Revenues for the quarter were $23.1 million,
representing a 10.4% decline from the $25.8 million reported in the
same period last year. Consolidated net income for the fourth
quarter 2008 totaled $289,000, or $0.08 per diluted share, compared
to $1.1 million, or $0.32 per diluted share, in the same period
last year. The Company's results in the fourth quarter 2007
included certain income tax benefits derived from the Company's
participation in its former parent's consolidated U.S. tax return,
which are not available to the Company as a stand alone
organization. The impact of such tax benefits approximated $0.15
per diluted share in the 2007 fourth quarter. Activity levels in
the fourth quarter of 2008 slowed significantly. As a result, the
Company's billable consultant-base declined by approximately 11%.
Much of this headcount decline occurred late in the quarter, and
accordingly, the impact of the reduction is not fully reflected in
the Company's fourth quarter operating results. Additionally,
operating expenses in the fourth quarter of 2008 included $114,000
of severance costs and $258,000 of bad debt expense. Full Year
Results Revenues for 2008 were $96.6 million, or 7.7% lower than
the $104.7 million of revenues recognized in 2007. Consolidated net
income for 2008 was $3.5 million, or $0.98 per diluted share,
compared to $5.4 million, or $1.51 per diluted share last year. As
discussed above, results prior to September 30, 2008 included
certain income tax benefits related to the Company's participation
in its former parent's consolidated U.S. tax return, which are not
available as a stand alone organization. The impact of such
benefits on consolidated net income totaled $1.0 million, or $0.27
per diluted share in 2008 and $2.1 million, or $0.59 per diluted
share in 2007. Steven Shangold, Chief Executive Officer of Mastech
stated, "The recession has deepened during the fourth quarter, and
broadened well beyond the financial services sector. These
deteriorating economic conditions are compelling companies to
reduce their discretionary spending in all areas, including IT
services, and this is having an impact on our operations and
bottom-line, as evidenced by our fourth quarter results.
Industry-trade organizations, such as Staffing Industry Analysts,
have significantly lowered their 2009 outlook for domestic staffing
services in recent months. Given this increasingly cautious view of
our industry, our near-term focus is to prudently manage our cost
structure, enhance operating efficiencies, preserve capital and
strengthen our overall competitive position, so we can capitalize
on market opportunities as the economy begins to recover."
Commenting on the Company's financial position, Jack Cronin, Chief
Financial Officer, stated, "At December 31, 2008 we had $4.4
million of cash and cash equivalents on hand, no outstanding
long-term debt, and access to $8 million of credit under our
existing credit facility. Despite the uncertainty that exists about
the duration and depth of this recession, we believe that we are
financially positioned to ride-out these challenging times." In
conjunction with its fourth quarter earnings release, Mastech will
host a conference call at 8:00 A. M. EST on March 5, 2009 to
discuss these results and to answer questions. A live webcast of
this conference call will be available on the company's website,
http://www.mastech.com/. Simply click on the Investor Relations
section and follow the links to the live webcast. The webcast will
remain available for replay through March 12, 2009. About Mastech
Holdings, Inc.: Leveraging the power of 20 years of IT experience,
Mastech (NYSE Alternext US: MHH) provides Information Technology
services in the disciplines which drive today's business
operations. Clients turn to Mastech for comprehensive IT services
including: IT Consulting; OneSource(tm) Co-Managed projects; and
supplemental IT resources. More information about Mastech can be
found at Mastech's website: http://www.mastech.com/.
Forward-Looking Statements: Certain statements contained in this
release are forward-looking statements based on management's
expectations, estimates, projections and assumptions. Words such as
"expects," "anticipates," "plans," "believes," "scheduled,"
"estimates" and variations of these words and similar expressions
are intended to identify forward-looking statements, which include
but are not limited to projections of revenues, earnings, segment
performance, and cash flow. These statements are based on
information currently available to the Company and it assumes no
obligation to update the forward-looking statements as
circumstances change. These statements are not guarantees of future
performance and involve certain risks and uncertainties, which are
difficult to predict. Therefore, actual future results and trends
may differ materially from what is forecast in forward-looking
statements due to a variety of factors, including, without
limitation, the level of market demand for its services, the highly
competitive market for the types of services offered by the
company, the impact of competitive factors on profit margins,
market conditions that could cause the company's customers to
reduce their spending for its services, and the company's ability
to create, acquire and build new lines of business, to attract and
retain qualified personnel, reduce costs and conserve cash. MASTECH
HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in
thousands) (unaudited) December 31, December 31, 2008 2007 ----
---- ASSETS Current assets: Cash and cash equivalents $4,361 $1,524
Accounts receivable, net 9,240 11,444 Prepaid and other current
assets 376 194 Deferred income taxes 253 289 --- --- Total current
assets 14,230 13,451 Investment in unconsolidated affiliate 41 62
Land, building, equipment and leasehold improvements, net 235 425
Deferred income taxes 191 327 --- --- Total assets $14,697 $14,265
======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable $2,454 $2,873 Accrued payroll and
related costs 2,700 3,465 Deferred revenue and other 140 91 --- ---
Total current liabilities 5,294 6,429 Total liabilities 5,294 6,429
Shareholders' equity: iGATE's net investment - 7,836 Common stock,
par value $0.01 per share 36 - Additional paid-in capital 9,078 -
Retained earnings 289 - --- ----- Total shareholders' equity 9,403
7,836 ----- ----- Total liabilities and shareholders' equity
$14,697 $14,265 ======= ======= MASTECH HOLDINGS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except
per share amounts) (unaudited) Three Months Years ended ended
December 31, December 31, 2008 2007 2008 2007 ---- ---- ---- ----
Revenues $23,086 $25,760 $96,650 $104,693 Cost of revenues 18,980
20,805 78,328 82,618 ------ ------ ------ ------ Gross profit 4,106
4,955 18,322 22,075 Selling, general and administrative 3,528 3,817
13,846 15,696 Depreciation and amortization 80 78 314 320 ------
------ ------ ------ Income from operations 498 1,060 4,162 6,059
Other income/(expense), net (7) 19 (2) 82 ------ ------ ------
------ Income before income taxes 491 1,079 4,160 6,141 Income tax
expense 202 (66) 638 701 ------ ------ ------ ------ Net income
$289 $1,145 $3,522 $5,440 ==== ====== ====== ====== Earnings per
share: Basic $0.08 $0.32 $0.98 $1.51 ===== ===== ===== =====
Diluted $0.08 $0.32 $0.98 $1.51 ===== ===== ===== ===== Weighted
average common shares outstanding: Basic 3,607 3,607 3,607 3,607
===== ===== ===== ===== Diluted 3,622 3,607 3,611 3,607 ===== =====
===== =====
http://www.newscom.com/cgi-bin/prnh/20080508/NETH059LOGO-b
http://photoarchive.ap.org/ DATASOURCE: Mastech Holdings, Inc.
CONTACT: Donna Mascia, Manager, Investor Relations of Mastech
Holdings, Inc., +1-888-330-5497 Web Site: http://www.mastech.com/
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