MTC Announces Update on Acquisition and Issues Final 2005 Full Year Guidancetitle
DAYTON, Ohio, Nov. 30 /PRNewswire-FirstCall/ -- MTC Technologies, Inc.
(Nasdaq: MTCT), a significant provider of engineering, technical, and
management services to the Department of Defense and national security
agencies, today announced anticipated financial results for 4th quarter and
full year 2005.
MTC also announced that the expected acquisition, for which the Company
delayed its 4th quarter and full year 2005 guidance, will not occur this year.
Conditions necessary for the acquisition to occur were not able to be
satisfied and may never be satisfied. However, MTC will continue to monitor
the situation, as the target company remains an extremely attractive strategic
fit for the Company.
MTC announced that it was narrowing the range on its 4th quarter and full
year 2005 Net Income and Earnings per Share guidance to:
Full Year 2005
Net Income Guidance - Revised $21.2 million to $21.7 million
Previous Net Income Guidance $20.9 million to $22.3 million
Diluted Earnings per Share Range - Revised $1.34 to $1.37
Previous Diluted Earnings per Share Guidance $1.32 to $1.41
4th Quarter 2005
Net Income Guidance - Revised $5.3 million to $5.8 million
Previous Net Income Guidance $5.1 million to $6.4 million
Diluted Earnings per Share Range - Revised $0.34 to $0.37
Previous Diluted Earnings per Share Guidance $0.32 to $0.40
MTC also narrowed and lowered the range for its 4th quarter and full year
2005 revenue guidance, primarily as the result of certain lower margin
business being deferred into 2006. Revenue guidance for 2005 has been reduced
by about $13 million or about 3% at the midpoint of the guidance range:
Full Year 2005
Revenue Guidance - Revised $373 million to $377 million
Previous Revenue Guidance $384.9 million to $390.2 million
4th Quarter 2005
Revenue Guidance - Revised $96.8 million to $100.8 million
Previous Revenue Guidance $108.7 million to $114.0 million
In addition to the business delays referenced above, MTC continues to
experience a lack of funding for its $47 million Army reset contract in
Speyer, Germany. Originally, MTC anticipated 2005 revenue of about
$20 million on this contract, which was later lowered to $15 million. As
reported during the Companys 3rd quarter conference call, MTC further reduced
its expectations to about $5 million in 2005 revenue on this contract.
At that time, it was anticipated that even with this disappointment, the
Company would meet its full year revenue guidance. Unfortunately, delays in
other programs resulted in the need to further reduce revenue guidance for
2005. However, these delays were on programs with significant material and
subcontract purchase components, which inherently have lower margins than the
Companys direct work. Therefore these decreases in revenue did not result in
net income and earnings per share being reduced outside of the Companys
previous guidance range.
As the Company looked to 2006, customer expectations were such that
approximately $30-$35 million would have been a reasonable expectation for the
Speyer contract revenue. However, the Armys continued lack of funding for
this contract, even though there are a substantial number of vehicles
requiring refurbishment, has created significant doubt as to how well, if at
all, this contract will be funded in 2006.
Due to the significant impact of this contract on the Companys 2006
forecast, the Company will not be issuing 2006 guidance until it reports its
4th quarter results in February 2006.
The Company notes, however, that should there be no further funding of the
Speyer contract, MTC would anticipate organic growth of 10-15% in 2006 and an
EBITDA percentage of revenue in excess of 11%. Depending on the extent of any
additional funding on the Speyer contract, the organic growth percentage could
improve.
Anticipated 4th quarter results for 2005, assuming achievement of the mid-
point of the revised 2005 guidance, compare to 4th quarter 2004 as follows:
- Revenue up $22.4 million or 29% (16% organic) over 4th quarter 2004
- Net Income up $0.6 million or 12% over 4th quarter 2004
- Earnings per share up 9% to $0.35 as compared to 4th quarter 2004
- EBITDA of approximately $11.9 million or 12% of revenue, an increase of
$2.6 million or 28% over 4th quarter of 2004.
Anticipated full year results for 2005, assuming achievement of the mid-
point of the guidance, compare to full year 2004 as follows:
- Revenue up $102 million or 37% (17% organic growth)
- Net Income up $3.8 million or 21%
- Earnings per share of $1.35, a 17% increase
- EBITDA of approximately $45.1 million or 12% of revenue, an increase of
41%
Conference Call: Hosted by MTC senior management, a conference call has
been scheduled for 9:00 a.m. Eastern Standard Time (6:00 a.m. Pacific Time) on
December 1, 2005. The call will be webcast simultaneously through a link on
the Investor Relations section of the Companys website at
http://www.mtctechnologies.com. To listen to the live call, please go to the website
15 minutes early to register, download, and install any necessary audio
software. A replay of the webcast will remain available for 15 days.
MTC, through its wholly owned subsidiaries, provides systems engineering,
information technology, intelligence, and program management services to the
federal government. Cited by BusinessWeek as the 11th fastest growing small
company in the United States, by Forbes as 23rd of Americas 200 best small
businesses, by Washington Technology as 59th in revenue growth among the "Top
100" of IT Federal Prime Contractors, and ranked 2nd by Aviation Week & Space
Technology as the "Top Performing Small Company," MTC employs approximately
2,700 people in more than 40 locations. The company was founded in 1984 and is
headquartered in Dayton, Ohio.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: The statements contained in this release that are not present or
historical facts, including without limitation the Companys results for the
4th quarter and full year 2005 and beyond, are forward-looking statements that
are subject to risks and uncertainties that could cause actual results to
differ materially from those set forth in, or implied by, forward-looking
statements. These risks and uncertainties include: risks related to the growth
of our FAST program, including strains on resources and decreases in operating
margins; federal government audits and cost adjustments; differences between
authorized amounts and amounts received by us under government contracts;
government customers failure to fund or exercise options under contracts;
changes in federal government (or other applicable) procurement laws,
regulations, policies and budgets; our ability to attract and retain qualified
personnel; our ability to retain contracts during re-bidding processes;
pricing pressures; undertaking acquisitions that might increase our costs or
liabilities or be disruptive; integration of acquisitions; and changes in
general economic and business conditions. For more information concerning
these risks and uncertainties, see the Securities and Exchange Commission
filings for MTC. These statements reflect the Companys current beliefs and
are based upon information currently available to it. Be advised that
developments subsequent to this release are likely to cause these statements
to become outdated with the passage of time, and we specifically disclaim any
obligation to update these statements.
For further information on MTC, visit the website at
http://www.mtctechnologies.com.
