Schuff Steel Reports Third-Quarter Results
Although down for the quarter, it looks like they are saying that a
good 4th quarter is very likely. Backlog looks very interesting. Nice
P/E relative to growth. Certainly appears to be worth some research.
David
_______________________________________________
Thursday November 6 7:01 AM EST
Company Press Release
Schuff Steel Reports Third-Quarter Results
Nine-Month Revenues Up 24 Percent
PHOENIX--(BUSINESS WIRE)--Nov. 6, 1997--
Financial Summary (Unaudited)
Three Months Ended Nine Months Ended
9/30/97 9/30/96 9/30/97 9/30/96
Revenues $35,439,000 $38,861,000 $98,123,000 $78,962,000
Net income 2,162,000 4,111,000 6,462,000 7,233,000
Pro forma net
income 2,162,000 2,467,000 4,949,000 4,340,000
Pro forma net
income per share $ 0.31 $ 0.41 $ 0.77 $ 0.71
Schuff Steel Co. (Nasdaq:SHUF), a rapidly growing provider of a fully integrated range of steel construction services, Thursday announced financial and
operating results for the company's third quarter ended Sept. 30, 1997.
Revenues for the quarter ended Sept. 30, 1997, were $35,439,000, a decrease of 8.8 percent compared with $38,861,000 for the quarter ended Sept. 30,
1996. Schuff Steel reported net income of $2,162,000, or $0.31 per share, on 7.1 million shares outstanding for the third quarter ended Sept. 30, 1997,
compared with pro forma net income of $2,467,000, or $0.41 per share, for 6.1 million shares outstanding for the same quarter a year ago.
''Our third quarter was strong and in line with our expectations,'' said Ken Zylstra, chief financial officer of Schuff Steel. ''Last year's quarter was off
the charts, a truly spectacular period. In our business, quarter-to-quarter comparisons can be misleading. It's more important to focus on the year-to-date
numbers.
''For example, revenues for the nine months ended Sept. 30, 1997, were more than 24 percent higher than for the comparable period in 1996. In
addition, we were awarded nearly $50 million in contracts in the third quarter of 1997 of which we have realized less than 1 percent in revenues. So there
are times when revenues from quarter to quarter may be uneven.''
Nine-Month Performance
Revenues for the nine months ended Sept. 30, 1997, increased by more than 24 percent to $98,123,000, compared with revenues of $78,962,000 for the
year-ago period. The company reported net income of $4,949,000 for the nine months ended Sept. 30, 1997, or $0.77 per share, on 6.4 million shares
outstanding compared with pro forma net income of $4,340,000, or $0.71 per share, on 6.1 million shares outstanding for the year-ago period.
Pro forma figures for the nine-month period include a provision for income taxes relating to prior operations as an S corporation.
Gross Profit Declines Slightly for Three-Month Period; Increases for Nine-Month Period
Gross profit for the three months ended Sept. 30, 1997, fell slightly by 0.3 percent to $5,865,000 from $5,885,000 for the three months ended Sept. 30,
1996. Gross profit increased by more than 18 percent to $14,155,000 for the nine months ended Sept. 30, 1997, from $11,968,000 for the nine-month
period ended Sept. 30, 1996.
As a percentage of revenues, gross profit increased to 16.6 percent of revenues for the three months ended Sept. 30, 1997, from 15.1 percent of revenues
for the year-ago period. For the nine-month period ended Sept. 30, 1997, gross profit as a percentage of revenues decreased to 14.4 percent from 15.2
percent for the nine-month period in 1996.
The increase in margins for the third quarter of 1997 was due in part to proceeds from a contract claim and an increase in expected revenues previously
not reported due to uncertainties. The decrease in margins as a percentage of revenues during the nine months ended Sept. 30, 1997, was primarily
attributable to above-average 1996 margins.
General and Administrative Expenses
General and administrative expenses increased by 30 percent to $2,281,000 for the three months ended Sept. 30, 1997, from $1,749,000 for the three
months ended Sept. 30, 1996. For the nine months ended Sept. 30, 1997, general and administrative expenses increased by 40 percent to $6.4 million
from $4.6 million for the prior year period.
As a percentage of revenues, general and administrative expenses increased to 6.4 percent for the three months ended Sept. 30, 1997, from 4.5 percent
for the three months ended Sept. 30, 1996, and to 6.6 percent for the nine months ended Sept. 30, 1997, from 5.8 percent for the nine months ended
Sept. 30, 1996.
Additional general and administrative expenses included those assumed as a result of the company's acquisition of B&K Steel; additional personnel and
employee-related expenses; professional services related to Schuff Steel's status as a public company; higher rental rates on preexisting properties; and
additional office space and related expenses.
Increased Backlog
Schuff Steel's backlog increased to approximately $76.8 million during the three months ended Sept. 30, 1997, from $53.2 million in the second quarter
of 1997, an increase of more than 45 percent.
Despite its current growth estimates, the company has experienced, and is expected to continue to experience, variations in quarterly and annual results of
operations. Factors that may affect these results include, among other things, the timing and terms of major contract awards and the starting and
completion dates of projects.
External Growth Strategy
''The marketplace continues to validate our fast-track, design-as-you-go operating philosophy, making us a leading one-stop shop for the steel
construction industry,'' said Scott Schuff, president and CEO.
''Our long-term growth strategy continues to include exploring potential acquisitions in the steel fabrication and erection industry, which we believe is
highly fragmented. We intend to add plant capacity and gain market share in order to further penetrate domestic and international markets.''
Schuff Steel is a rapidly growing steel fabrication and erection company that provides a fully integrated range of steel construction services. The company
offers complete, turnkey steel construction services featuring engineering, detailing, shop fabrication and field erection.
Examples of major projects include: MGM Grand Hotel & Casino, Paris Hotel & Casino, New York New York Hotel & Casino, Bank One Ballpark,
Intel Corp.'s Fab 12 Plant, and Bajo de la Alumbrera, one of the largest copper mines in the world.
For further information regarding Schuff Steel free of charge via fax, dial 800/PRO-INFO and enter SHUF.
This news release contains forward-looking statements, including statements regarding, among other items, company's business strategy, growth
strategy, growth and demand for the company's services, including demand for new casino, sport stadium, commercial and industrial plant construction,
general economic trends in the company's principal geographic or product markets, and other anticipated trends in the company's business. These
forward-looking statements are based largely on the company's expectations and are subject to a number of risks and uncertainties, some of which cannot
be predicted or quantified and are beyond the company's control. Future results could differ materially from those set forth in, contemplated by or
underlying the forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Factors that could cause actual
results to differ materially from the company's expectations are detailed in the company's filings to the Securities and Exchange Commission, including
the company's prospectus, dated June 30, 1996.
Schuff Steel Co.
Consolidated Statements of Income
(unaudited, in thousands, except per-share data)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Revenues $35,439 $38,861 $98,123 $78,962
Cost of revenues earned,
including depreciation
and amortization expense
of $324,996, $269,637,
$958,838 and $786,896,
respectively 29,574 32,976 83,968 66,994
Gross profit 5,865 5,885 14,155 11,968
General and administrative
expenses, including
depreciation and
amortization of $55,140,
$43,519, $168,512 and
$127,457, respectively 2,281 1,749 6,457 4,605
Interest expense 72 100 263 337
Operating income 3,512 4,036 7,435 7,026
Other income 146 75 414 207
Income before income taxes 3,658 4,111 7,849 7,233
Provision for income taxes:
Current 1,311 -- 1,501 --
Deferred 185 -- (114) --
1,496 -- 1,387 --
Net income $ 2,162 $ 4,111 $ 6,462 $ 7,233
Pro forma net income data:
Net income, reported above $ 2,162 $ 4,111 $ 6,462 $ 7,233
Pro forma provision for
income taxes related to
operations as S Corporation -- 1,644 1,513 2,893
Pro forma net income $ 2,162 $ 2,467 $ 4,949 $ 4,340
Pro forma net income per
share $ 0.31 $ 0.41 $ 0.77 $ 0.71
Shares used in computation 7,077 6,070 6,392 6,070
-0-
Schuff Steel Co.
Consolidated Balance Sheets
(in thousands)
Sept. 30, Dec. 31,
1997 1996
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 6,454 $ 7,253
Restricted funds on deposit 2,005 2,249
Receivables, net 20,425 16,885
Costs and recognized earnings in
excess of billings
on uncompleted contracts 1,560 871
Inventories 7,410 11,311
Prepaid expenses & other assets 876 178
Deferred income taxes 408 --
Total current assets 39,138 38,747
Property and equipment, net 6,023 5,116
Intangible pension asset 95 106
Other assets 100 --
$45,356 $43,969
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $ 1,635 $ 4,043
Billings in excess of costs and
recognized earnings on
uncompleted contracts 13,060 19,623
Accrued payroll and employee benefits 2,086 1,539
Other accrued liabilities 1,471 367
Stockholder distributions payable 630 4,555
Income taxes payable 1,213 --
Current portion of long-term debt 304 144
Total current liabilities 20,399 30,271
Deferred income taxes 295 --
Long-term debt, less current portion 2,323 2,753
Deferred rent payable 166 --
Accrued pension cost -- 263
Shareholders' equity:
Preferred stock, $.001 par value,
1 million shares authorized,
no shares issued and outstanding -- --
Common stock, $.001 par value, 20 million
shares authorized, 7 million shares
issued and outstanding 7 5
Additional paid-in-capital 14,013 15
Unfunded pension losses (230) (519)
Retained earnings 8,383 11,181
22,173 10,682
$45,356 $43,969
Contact:
Schuff Steel Co., Phoenix
Kenneth F. Zylstra, 602/252-7787
or
Financial Relations Board
Daniel Saks/Larry Delaney, 310/442-0599
(general inquiries)
Michaelle Burstin, 310/442-0599
(analyst inquiries)
More news for referenced ticker symbols: SHUF, and related industries: construction, mining.
Additional news and quotes: Intel Corp - INTC.
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