Encompass Announces 2002 Second Quarter Results
HOUSTON--(BUSINESS WIRE)--Aug. 13, 2002--Encompass Services Corporation (NYSE:ESR) today reported financial results for the quarter ended June 30, 2002, which are highlighted below:
in millions, except per share data Second Quarter
6/30/02
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Revenues $866.9
EBITDA 18.6
Operating income 9.0
Net loss from continuing operations (5.4)
Net loss per share from continuing operations, after
preferred dividends $(0.17)
"Our operating results for the second quarter were negatively affected by approximately $13.3 million in previously unforeseen project write-downs associated with two large fixed price power projects," said Joe Ivey, Encompass' President and Chief Executive Officer. "The power projects are essentially complete and such projects represent a very small portion of our total business. We have taken appropriate corrective action for these projects and strengthened our large project review process."
"With the exception of these two projects our second quarter results were substantially in line with our internal expectations. Second quarter revenues fell $129.7 million, or approximately 13%, from the year-ago quarter. The June 30, 2002 backlog was $1.43 billion, or 11.6% below our comparable backlog last year. I believe that our revenue and backlog performance this quarter compares favorably to the 20% decline from year-ago levels in non-residential construction spending recently reported by the U.S. Department of Commerce."
SEC Certification
Encompass stated that Joe Ivey, Chief Executive Officer and Darren Miller, Chief Financial Officer have signed, and the Company has filed, the required certifications with the U.S. Securities and Exchange Commission in the form specified by the Commission covering the Company's Form 10-K for the year ended December 31, 2001 (and subsequent amendments on Form 10-K/A), its Form 10-Q for the first quarter of 2002, its definitive proxy materials for 2002 and all Form 8-K's filed subsequent to the filing of the 2001 Form 10-K.
NYSE notification
The Company was notified by the New York Stock Exchange (NYSE) in late July that it is subject to de-listing from the NYSE since its stock has traded below the $1.00 average minimum requirement for more than 30 consecutive days. The Company formally responded to the NYSE in the time frame required and stated its intention to meet the listing requirements within six months. In order to continue to meet the listing requirements, the Company will seek shareholder approval in its upcoming special shareholder meeting to effect a reverse stock split at a ratio between one for five and one for fifteen, to be determined by the Company's Board. The Company has not set a date for the special meeting of shareholders but anticipates it will occur at the end of September or beginning of October.
Updated Outlook for the Full Year 2002
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Factors affecting these statements are detailed under Forward-Looking Statements.
Considering the financial impact of the write-downs associated with the two previously mentioned power projects and our most recent internal forecasts, revised guidance for 2002 is as follows:
-- Revenues are expected to range from $3.4 to $3.6 billion.
-- EBITDA is expected to range from of $110 to $125 million.
-- Net interest expense is expected to range from $75 to $80
million.
-- Capital spending is expected to range from $20 to $30 million.
-- Depreciation expense is expected to range from $35 to $40
million.
-- EPS is expected to range from $(0.25)-$(0.35).
The Company remained in compliance with its financial covenants under its senior credit facility as of June 30, 2002. Current forecasts for the remainder of the year indicate continued compliance with existing covenants.
Conference Call Information
The Company will host a conference call to discuss the information in this press release on Tuesday, August 13, 2002 at 11 a.m. Eastern Time. |
