MPWG Mpw Industrial Services

MPW Reports Fiscal Second Quarter and Year-To-Date Results HEBRON, Ohio, Feb. 6 /PRNewswire-FirstCall/ -- MPW Industrial Services Group, Inc. today announced operating results for its second quarter ended December 31, 2003. Operating Results Total revenue was $22.3 million for the second fiscal quarter ended December 31, 2003 compared to $24.0 million for the quarter ended December 31, 2002. Loss from operations was $(29) thousand for the second quarter of fiscal 2004 compared to income from operations of $1.2 million for the second quarter of fiscal 2003. The Company reported a net loss of $(570) thousand, or $(0.05) per share, for the second fiscal quarter ended December 31, 2003, compared with net income of $271 thousand, or $0.02 per share, for the same period last year. Revenues for the second quarter of fiscal 2004 decreased from the same prior year period primarily in the Industrial Cleaning and Facility Maintenance segment as the result of the loss of certain customers due to a combination of factors, including aggressive pricing by competitors, and decreased project work at existing customers. The decline in operating income from the second quarter of fiscal 2003 was driven by high fixed labor costs, increased selling expenses as a result of an increased focus on business development and increased workers compensation and insurance costs. The net loss for the second quarter of fiscal 2004 was also negatively impacted by a reduction in the effective annual income tax rate from 43% to 29% to better reflect the Company's estimate of a lower effective tax rate for the year due to changes in expected income levels. The change in the tax rate increased the net loss by approximately $350 thousand, or $0.03 per share. Monte Black, Chairman and Chief Executive Officer, stated, "Overall, the second quarter results did not meet expectations. While results continue to remain below last year's levels, we are working to implement several internal initiatives to drive towards improved profitability. These initiatives include increasing our sales and marketing efforts, streamlining our internal business processes and the continuation of a cost and expense reduction plan." Total revenue for the first six months of fiscal 2004 was $42.0 million compared with $48.0 million for the first six months of fiscal 2003. Loss from operations was $(2.3) million for the six months ended December 31, 2003 compared to income from operations of $1.4 million for the six months ended December 31, 2002. The net loss for the six months ended December 31, 2003 was $(2.0) million, or ($0.18) per share, compared with a net loss of $(2.8) million, or $(0.26) per share, for the six months ended December 31, 2002. The net loss for the first six months of fiscal 2003 included a $2.8 million, net of tax of $1.9 million, non-cash goodwill impairment charge as a result of the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets". This charge was recorded as a cumulative effect of a change in accounting principle as of July 1, 2002. Corporate Profile MPW Industrial Services Group, Inc. is a leading provider of integrated, technically based industrial cleaning and related facilities support services in North America. MPW offers three principal service lines that are integral to a wide variety of manufacturing processes. These three service lines are industrial cleaning and facility maintenance, industrial container cleaning and industrial process water purification. Forward-Looking Statements The statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, competitive and other market factors, customer purchasing behavior, general economic conditions and other facets of the Company's business operations. Additional information about these and other risks and uncertainties can be found in "Investment Considerations" in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2003; and in other documents the Company files or has filed with the Securities and Exchange Commission. Further information may also be obtained at the Company's Internet site: http://www.mpwservices.com/ . MPW INDUSTRIAL SERVICES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, June 30, 2003 2003 (unaudited) ASSETS Cash $691 $2,726 Accounts receivable, net 13,566 17,201 Inventories 2,346 2,294 Deferred income taxes 1,560 1,461 Prepaid expenses 839 1,197 Other current assets 17 16 Total current assets 19,019 24,895 Property and equipment, net 33,071 35,120 Goodwill 6,044 6,044 Other intangibles, net 6,581 6,889 Other assets 104 122 Total assets $64,819 $73,070 LIABILITIES Accounts payable $5,149 $8,218 Accrued compensation and related taxes 1,645 2,373 Current maturities of long-term debt 1,298 1,322 Other accrued liabilities 4,228 6,153 Total current liabilities 12,320 18,066 Long-term debt 18,254 18,892 Deferred income taxes 3,603 3,400 Other long-term liabilities 158 469 Total liabilities 34,335 40,827 SHAREHOLDERS' EQUITY Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding - - Common stock, no par value; 30,000,000 shares authorized; 10,958,707 and 10,939,957 shares issued and outstanding at December 31, 2003 and June 30, 2003,respectively 109 109 Additional paid-in capital 41,544 41,507 Accumulated deficit (11,030) (9,027) Accumulated other comprehensive loss (139) (346) Total shareholders' equity 30,484 32,243 Total liabilities and shareholders' equity $64,819 $73,070 MPW INDUSTRIAL SERVICES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share data) Three Months Ended Six Months Ended December 31, December 31, 2003 2002 2003 2002 (unaudited) (unaudited) Revenues $22,315 $23,982 $41,975 $48,006 Cost of services (including depreciation) 18,090 18,735 35,107 37,934 Gross profit 4,225 5,247 6,868 10,072 Selling, general and administrative expenses 4,254 4,065 9,128 8,699 Income (loss) from operations (29) 1,182 (2,260) 1,373 Interest expense, net 278 512 561 1,013 Income (loss) from continuing operations before income taxes (benefit) and equity in loss of affiliate (307) 670 (2,821) 360 Provision (benefit) for income taxes 263 281 (818) 151 Income (loss) from continuing operations before equity in loss of affiliate (570) 389 (2,003) 209 Equity in loss of affiliate - (149) - (184) Income (loss) from continuing operations(570) 240 (2,003) 25 Income from discontinued operations, net of tax - 31 - 43 Income (loss) before cumulative effect of change in accounting principle (570) 271 (2,003) 68 Cumulative effect of change in accounting principle - - - (2,845) Net income (loss) $(570) $271 $(2,003) $(2,777) Net income (loss) per share, basic and diluted: Income (loss) from continuing operations $(0.05) $0.02 $(0.18) $- Income from discontinued operations, net of tax - - - - Income (loss) before cumulative effect of change in accounting principle $(0.05) $0.02 $(0.18) $- Cumulative effect of change in accounting principle - - - (0.26) Net income (loss) per share $(0.05) $0.02 $(0.18) $(0.26) Weighted average shares outstanding 10,951 10,940 10,947 10,940 Weighted average shares outstanding, assuming dilution 10,951 10,958 10,947 10,976 DATASOURCE: MPW Industrial Services Group, Inc. CONTACT: Robert Valentine, Vice President and Chief Financial Officer of MPW Industrial Services Group, Inc., +1-740-927-8790 Web site: http://www.mpwservices.com/ Company News On-Call: http://www.prnewswire.com/comp/126032.html

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