Baker Files Form 10-Q for 2008 First Quarter; Reports Record First Quarter Earnings...

Baker Files Form 10-Q for 2008 First Quarter; Reports Record First Quarter
Earnings Per Share

PITTSBURGH, July 22 /PRNewswire-FirstCall/ -- Michael Baker Corporation
(Amex: BKR) today announced the filing of its Form 10-Q for the first quarter
of 2008, which includes the Company's recently restated results for the first
quarter of 2007. The financial results contained in the filing are summarized
here.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061214/BAKERLOGO )
For the quarter, Baker reported net income of $6.1 million, or a
first-quarter record $0.69 per diluted share, on revenues of $174.9 million,
compared to net income of $1.6 million, or $0.18 per diluted share, on
revenues of $169.6 million in the first quarter of 2007.
The first-quarter 2008 revenue increase is attributable to a 20 percent
period-over-period growth in the Company's Engineering segment revenue, which
was partially offset by a 17 percent period-over-period decrease in Energy
segment revenue. The Engineering revenue increase relates primarily to growth
in most of the segment's practice areas, including growth in the work
performed for an unconsolidated joint venture operating in Iraq, and the
recognition of a non-recurring project settlement under a previously awarded
contract that was subsequently reprocured by the client. The decrease in the
Energy segment's revenue was caused primarily by a client's sale of properties
and the resulting termination of a managed services contract during the third
quarter of 2007, and a change in the scope of another managed services
contract.
Operating income before corporate overhead allocations in the Engineering
segment for the first quarter of 2008 was $13.1 million, an increase of 36
percent compared to the operating income before corporate overhead allocations
for first-quarter 2007. This increase was the result of the non-recurring
project settlement mentioned above and an improved project mix compared to the
year-ago period. Operating income before corporate overhead allocations in the
Energy business for the first three months of 2008 was $1.3 million, a
significant improvement from the restated operating loss of $(0.4) million
before corporate overhead allocations for the same period of 2007. This
increase is attributable primarily to a decrease in self-insured general
liability costs and the realization of project incentive awards, but was
partially offset by an increase in workers' compensation insurance expense and
professional fees related to the previously mentioned restatement of the
Company's financial results.
Total backlog for the Engineering and Energy businesses at March 31, 2008,
was $1.31 billion, essentially the same as the total backlog at December 31,
2007. Of these totals, $427.6 million and $425.6 million at March 31, 2008,
and December 31, 2007, respectively, are considered funded backlog for the
Engineering segment. Included in funded backlog at March 31, 2008, was $50
million related to the Company's FEMA Map Modernization contract, compared to
$57 million at December 31, 2007.
On the balance sheet as of March 31, 2008, the Company had no long-term
debt and an available cash balance of approximately $26 million.
Commenting on the results, President and Chief Executive Officer Bradley
L. Mallory, said, "We are encouraged by our financial performance in the first
quarter, especially since the first three months are historically our slowest
period in the year. I am particularly pleased with the strength of our
Engineering segment and the fact that almost all of its operations achieved
revenue improvement compared to the same period last year. We are on a path to
sustain this performance as we solidify our business strategies that include
organic growth, acquisitions, and improving our business processes. Our
markets of focus continue to provide ample project opportunities to support
our growth agenda while our operating structure has been better aligned with
these markets." He added that the filing of this Form 10-Q with the
Securities and Exchange Commission brings the Company current with its filings
for the year and into full compliance with the listing standards of the
American Stock Exchange.
Michael Baker Corporation (http://www.mbakercorp.com) provides engineering
and operations and maintenance services for its clients' most complex
challenges worldwide. The firm's primary business areas are aviation,
defense, environmental, facilities, geospatial, homeland security, municipal &
civil, pipelines & utilities, transportation, water, and oil & gas. With more
than 4,000 employees in over 50 offices across the United States and
internationally, Baker is focused on creating value by delivering innovative
and sustainable solutions for infrastructure and the environment.
Conference Call
Michael Baker Corporation has scheduled a conference call and webcast for
Thursday, July 24, at 10:00 AM Eastern Daylight Savings Time to discuss these
results. Please call 800-860-2442 at least 10 minutes prior to the start of
the call. To access the webcast, please visit the investor relations portion
of Baker's website at www.mbakercorp.com.
(The above information contains forward-looking statements concerning our
future operations and performance. Forward-looking statements are subject to
market, operating and economic risks and uncertainties that may cause our
actual results in future periods to be materially different from any future
performance suggested herein. Factors that may cause such differences
include, among others: increased competition; increased costs; changes in
general market conditions; changes in industry trends; changes in the
regulatory environment; changes in our relationship and/or contracts with the
Federal Emergency Management Agency ("FEMA"); changes in anticipated levels of
government spending on infrastructure, including the Safe, Accountable,
Flexible, Efficient Transportation Equity Act-A Legacy for Users
("SAFETEA-LU"); changes in loan relationships or sources of financing; changes
in management; and changes in information systems. Such forward-looking
statements are made pursuant to the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995.)

FINANCIAL SUMMARY
(Unaudited)

First Quarter Operating Results For the quarter ended March 31
------------------------------- ------------------------------
(In thousands, except earnings per share) 2008 2007
------ ------
(Restated)

Revenues $174,874 $169,632

Gross profit 26,716 20,675

Income from operations 9,810 3,091

Income before income taxes 10,583 2,947

Net income $6,115 $1,550

Net income per share:
Basic $0.70 $0.18
Diluted $0.69 $0.18
--------------------------------------------------------------------------

For the quarter ended March 31
------------------------------
(In millions) 2008 2007
--------------------------------------------------------------------------
(Restated)
Revenues
Engineering $108.7 $90.2
Energy 66.2 79.4
--------------------------------------------------------------------------
Total revenues $174.9 $169.6
==========================================================================

--------------------------------------------------------------------------
Income/(loss) from operations before
Corporate overhead
Engineering $13.1 $9.6
Energy 1.3 (0.4)
--------------------------------------------------------------------------
Total segment income from operations
before Corp. overhead 14.4 9.2
--------------------------------------------------------------------------
Less: Corporate overhead
Engineering (3.4) (4.0)
Energy (1.4) (1.5)
--------------------------------------------------------------------------
Total Corporate overhead (4.8) (5.5)
--------------------------------------------------------------------------
Total income/(loss) from operations
Engineering 9.7 5.6
Energy (0.1) (1.9)
Other Corporate income/(expense) 0.2 (0.6)
--------------------------------------------------------------------------
Total income from operations $9.8 $3.1
==========================================================================

Backlog As of
------- ------------------------------
(In millions) 3/31/08 12/31/07
Engineering ------- --------
Funded $427.6 $425.6
Unfunded 690.9 696.6
--------------------------------------------------------------------------
Total Engineering 1,118.5 1,122.2
Energy 188.4 191.7
--------------------------------------------------------------------------
Total $1,306.9 $1,313.9
==========================================================================

Condensed Consolidated Balance Sheets As of
------------------------------------- ----------------------------
(In thousands) 3/31/08 12/31/07
-------- ---------
ASSETS
Cash and cash equivalents $25,935 $22,052
Receivables, net 109,222 109,453
Unbilled revenues on contracts in progress 93,749 88,214
Prepaid expenses and other 11,683 14,718
--------------------------------------------------------------------------
Total current assets 240,589 234,437

Property, plant and equipment, net 16,203 16,776
Goodwill and other intangible assets, net 17,339 17,367
Other long-term assets 5,959 7,770
--------------------------------------------------------------------------
Total assets $280,090 $276,350
==========================================================================

LIABILITIES & SHAREHOLDERS' INVESTMENT
Accounts payable $53,405 $55,940
Accrued compensation and insurance 39,297 41,974
Other accrued expenses 36,588 36,123
Billings in excess of revenues 18,012 15,771
--------------------------------------------------------------------------
Total current liabilities 147,302 149,808

Other long-term liabilities 11,572 11,485
--------------------------------------------------------------------------
Total liabilities 158,874 161,293
--------------------------------------------------------------------------

Common Stock 9,318 9,306
Additional paid-in capital 47,530 47,356
Retained earnings 69,175 63,060
Accumulated other comprehensive (loss)/income (46) 96
Less -- Treasury shares (4,761) (4,761)
--------------------------------------------------------------------------
Total shareholders' investment 121,216 115,057
--------------------------------------------------------------------------
Total liabilities & shareholders'
investment $280,090 $276,350
==========================================================================

SOURCE Michael Baker Corporation

David Higie of Michael Baker Corporation, +1-412-269-6449