Attached files
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| 8-K - UniTek Global Services, Inc. | v203065_8k.htm |
UniTek
Global Services, Inc. Announces Financial Results for Fiscal Third Quarter
2010
Revenue
Grows 52% Year-over-Year to $110.1 Million
Backlog
Increases to $913.1 Million
Net
Loss Improves by $3.1 million Year-over-Year to $3.9 Million
Adjusted
EBITDA Increases 52% Year-over-Year to $9.3 Million(1)
*****
Completed
Public Offering to Raise $82.6 Million
BLUE BELL, PA, November 17, 2010 —
UniTek Global Services, Inc. (“UniTek” or the “Company”) (Nasdaq GM:
UNTK), a premier provider of permanently outsourced infrastructure services to
the wireless and wireline telecommunications, broadband cable and satellite
television industries, today announced financial results for its fiscal third
quarter ended October 2, 2010.
Third
Quarter and Recent Financial and Business Highlights
|
·
|
Completed
public offering of 19 million shares at $4.75 per share generating net
proceeds of approximately $83
million.
|
|
·
|
Net
proceeds of public offering strengthen the Company's balance sheet by
allowing the pay down of approximately $62 million of debt while adding
approximately $21 million in cash for working capital
purposes.
|
|
·
|
Revenue
was $110.1 million compared to $72.6 million for the third quarter of 2009
– a 52% increase.
|
|
·
|
Three-year
backlog totaled $913.1 million at October 2, 2010, a record high for the
Company(5).
|
|
·
|
Adjusted
EBITDA increased 52% to a record $9.3 million, compared to adjusted pro
forma EBITDA of $6.1 million in the third quarter of 2009(1)(3).
|
|
·
|
Net
loss improved by $3.1 million to $3.9 million, compared with $7.0 million
for the third quarter of 2009.
|
|
·
|
Net
income after certain non-cash adjustments(4)
was $2.0 million, compared with $0.1 million in the third quarter of
2009.
|
|
·
|
Signed
4-year renewal of Home Services Provider contract with DIRECTV through
October 2014.
|
1
“Yesterday
we completed a successful public offering raising net proceeds of approximately
$83 million,” said C. Scott Hisey, UniTek’s Chief Executive Officer. “This
additional capital will allow us to repay approximately $62 million of debt,
with the remaining net proceeds of $21 million to be used for general corporate
purposes, including the execution of our backlog.
“The
third quarter was a highly productive period for UniTek and we are pleased with
our outstanding results,” Mr. Hisey continued. “We established important
financial and strategic objectives for 2010 and as of today we have achieved
them by successfully executing and growing the business, increasing backlog,
raising capital and paying down debt. We have continued to build our
technology and systems that allow for scalable growth and better efficiency, and
this resulted in improved margins for the quarter. Our Fulfillment segment
continues to perform at a high level, and we are well positioned to expand our
market share in Engineering and Construction as wireless demand climbs to
historic levels. As 2010 comes to a close, we believe 2011 is going to be an
excellent year for UniTek.”
Financial
Results for Quarter Ended October 2, 2010(2)
Revenue
increased 52% to $110.1 million for the three months ended October 2, 2010, from
$72.6 million for the three months ended October 3, 2009. This increase was
primarily attributable to growth in the Company’s Engineering and Construction
segment, which includes the results of Berliner, as well as organic growth
within the Fulfillment segment.
Gross
profit from continuing operations for the three months ended October 2, 2010 was
$18.2 million, or 17% of revenue, compared to $11.3 million, or 16% of revenue,
for the three months ended October 3, 2009. Gross profit from the
Company’s Fulfillment segment increased $3.4 million over the third quarter of
2009, primarily as a result of the Company’s continued efforts to improve
efficiencies, including the use of technology in the field and operational
improvements.
Net loss
improved by $3.1 million to ($3.9) million, or ($0.79) per basic and fully
diluted share (based on approximately 4.9 million weighted average shares
outstanding, adjusted for the one-for-28 reverse stock split effected on
November 9, 2010), for the three months ended October 2, 2010, from a loss of
($7.0) million, or ($1.79) per basic and fully diluted share (based on
approximately 3.9 million weighted average shares outstanding, adjusted for the
one-for-28 reverse stock split effected November 9, 2010), for the three months
ended October 3, 2009. Net loss includes $6.2 million of depreciation
and amortization and $6.0 million of interest expense (including $2.1 million in
non-cash interest expense) for the three months ended October 2,
2010.
Adjusted
EBITDA(3)
increased 52% to $9.3 million for the three months ended October 2, 2010
compared to adjusted pro forma EBITDA of $6.1 million for the three months ended
October 3, 2009. The Fulfillment segment’s year-over-year improvement
of $3.4 million in gross profit was the main contributor of this
increase. The adjusted pro forma EBITDA improvement also includes an
additional $1.9 million of year-over-year growth attributable to the wireless
business. The improvement in both segments is due to revenue
growth as well as improved operational performance. These increases
in adjusted pro forma EBITDA were partially offset by higher SG&A expenses
to support both the combined businesses and the increase in
revenues.
2
Net
income after certain non-cash adjustments(4)
increased to $2.0 million for the three months ended October 2, 2010 compared to
$0.1 million for the three months ended October 3, 2009. The increase
was due to revenue growth and improved operational performance as described
above.
UniTek’s
three-year backlog(5) totaled
$913.1 million as of October 2, 2010 and $705.2 million as of October 3, 2009,
on a pro forma basis, factoring in the merger with Berliner.
Reconciliations
of net income (loss) after certain non-cash adjustments and adjusted
EBITDA/adjusted pro forma EBITDA to net loss are as follows for the three months
ended October 2, 2010 (amounts in thousands):
|
Pro
Forma
|
||||||||||||||||
|
Three
Months Ended
|
Three
Months Ended
|
|||||||||||||||
|
October
2, 2010
|
October
3, 2009
|
October
2, 2010
|
October
3, 2009
|
|||||||||||||
|
Net
loss
|
$
|
(3,875
|
)
|
$
|
(6,982
|
)
|
$
|
(3,404
|
)
|
$
|
(6,982
|
)
|
||||
|
Berliner
pro forma net loss (a)
|
-
|
-
|
-
|
(1,370
|
)
|
|||||||||||
|
Non-cash
stock based compensation
|
408
|
473
|
408
|
497
|
||||||||||||
|
Non-cash
interest expense
|
2,144
|
1,117
|
2,144
|
1,642
|
||||||||||||
|
Non-cash
amortization
|
3,369
|
5,475
|
3,369
|
5,475
|
||||||||||||
|
Net
income (loss) after certain non-cash adjustments
|
$
|
2,046
|
$
|
83
|
$
|
2,517
|
$
|
(738)
|
||||||||
|
Loss
from discontinued operations
|
2
|
220
|
2
|
220
|
||||||||||||
|
Income
tax expense
|
48
|
297
|
48
|
(15
|
)
|
|||||||||||
|
Cash
interest expense
|
3,828
|
3,780
|
3,828
|
3,880
|
||||||||||||
|
Other
expense, non cash
|
29
|
59
|
29
|
39
|
||||||||||||
|
Depreciation
|
2,830
|
1,876
|
2,830
|
2,560
|
||||||||||||
|
Merger
transaction costs
|
471
|
164
|
-
|
164
|
||||||||||||
|
Adjusted
EBITDA/Adjusted pro forma EBITDA
|
$
|
9,254
|
$
|
6,479
|
$
|
9,254
|
$
|
6,110
|
||||||||
|
(a)
|
Berliner
pro forma net loss includes additional interest and amortization resulting
from the merger as if the merger had occurred at the beginning of the
periods presented.
|
Conference
Call
Management
will be hosting a conference call to review the financial results of UniTek at
8:30 a.m. Eastern Time, on Wednesday, November 17, 2010. Interested parties may
access the call by calling 1-877-941-8418 from within the United States, or
1-480-629-9811 if calling internationally and requesting conference call
4385402. Please dial-in approximately five minutes prior to the start
of the call. A replay will be available through December 1, 2010 and can be
accessed by dialing 1-877-870-5176 (U.S.), 1-858-384-5176 (International),
passcode 4385402.
3
The call
will also be webcast by ViaVid Broadcasting and can be accessed at www.unitekglobalservices.com
or at ViaVid's website at http://www.viavid.net
or by going to the following link http://viavid.net/dce.aspx?sid=00007E15. The
archived webcast will be available for 90 days. To access the web cast, you will
need to have the Windows Media Player on your desktop. For the free
download of the Media Player please visit: http://www.microsoft.com/windows/windowsmedia/en/download
About UniTek Global
Services
UniTek
Global Services is a provider of engineering, construction management and
installation fulfillment services to companies specializing in the
telecommunications, broadband cable, wireless and satellite industries. UniTek
has created a scalable operating platform, enabling each UniTek subsidiary to
deliver quality services to its Fortune 200 customers. UniTek, based in Blue
Bell, PA, utilizes a diverse workforce of over 5,200 deployed in over 102
locations in the United States and Canada. www.unitekgs.com
Forward-Looking
Statements
The
statements in this press release, which are not historical fact, are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements that are other than statements of historical
facts, including but not limited to statements regarding the impact of changes
in the Company’s revenue mix, the Company’s expected backlog completion and the
Company’s expectations for its business units in fiscal year 2010. These
statements are subject to uncertainties and risks including, but not limited to,
operating performance, general financial, economic, and political conditions
affecting the Company’s business and its target industries, the ability of the
Company to perform its obligations under its contracts and agreements with
customers and other risks contained in reports filed by the Company with the
Securities and Exchange Commission, including in our Transition Report on Form
10-K for the period from July 1, 2009 to December 31, 2009 and our Forms 10-Q
for the quarters ended April 3, July 3 and October 2, 2010. The
Company disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof.
Footnotes:
(1) The year-over-year
comparison to adjusted pro forma EBITDA of $6.1 million for the third quarter of
2009 includes the results of Berliner Communications, acquired by UniTek on
January 27, 2010.
(2) In
the merger of Berliner and UniTek, UniTek is the accounting acquirer with
Berliner the legal acquirer and registrant. Upon the completion of
the merger, Berliner changed its fiscal year end from June 30 to December
31. Berliner filed a Transition Report on Form 10-K on March 31, 2010
for the six-month period ended December 31, 2009. As the accounting
acquirer, UniTek’s historical results are presented for comparison purposes with
results of Berliner included in our consolidated results only after the
effective date of the merger, which was January 27, 2010.
4
(3)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a key
indicator used by our management to evaluate operating performance of our
company. While the Adjusted EBITDA is not intended to replace any presentation
included in these consolidated financial statements under generally accepted
accounting principles (GAAP) and should not be considered an alternative to
operating performance, we believe this measure is useful to investors in
assessing our performance with other companies in our industry. This calculation
may differ in method of calculation from similarly titled measures used by other
companies. Adjusted pro forma EBITDA is our EBITDA adding back
transaction costs for the merger and including the results of Berliner as if it
had occurred at the beginning of the period being presented.
(4) Net
income (loss) after certain non-cash adjustments is a key indicator used by our
management to evaluate operating performance of our company. While
the net (loss) after certain non-cash adjustments is not intended to replace any
presentation included in the consolidated financial statements under generally
accepted accounting principles, or GAAP, and should not be considered an
alternative to operating performance, we believe this measure is useful to
investors in assessing our performance in comparison with other companies in our
industry. Specifically, (i) non-cash compensation expense may vary due to
factors influencing the estimated fair value of performance based rewards,
estimated forfeiture rates and amounts granted, (ii) non-cash interest expense
varies depending on the timing of amendments to our debt and changes to the debt
structure and (iii) amortization of intangible assets is impacted by the
Company’s acquisition strategy and timing of acquisitions.
(5) Our
three-year backlog consists of uncompleted portions of services to be performed
under job-specific contracts and the estimated value of future services that we
expect to provide under master service agreements and other long-term contracts.
Many of our contracts are multi-year agreements. We include in our backlog the
amount of services projected to be performed over the terms of the contracts,
where applicable, or based on our historical experience with customers and our
experience in procurements of this type.
Contact Information
The
Piacente Group | Investor Relations
Kristen
McNally | Lee Roth
(212)
481-2050
unitek@tpg-ir.com
Tables
follow:
5
UNITEK
GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Amounts
in thousands)
(Unaudited)
|
October
2,
|
December
31,
|
|||||||
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$
|
1,688
|
$
|
2,263
|
||||
|
Restricted
cash
|
-
|
133
|
||||||
|
Accounts
receivable and unbilled revenue, net of allowances
|
66,933
|
24,680
|
||||||
|
Inventories
|
11,205
|
8,326
|
||||||
|
Prepaid
expenses and other current assets
|
5,584
|
3,804
|
||||||
|
Total
current assets
|
85,410
|
39,206
|
||||||
|
Property
and equipment, net
|
17,463
|
20,665
|
||||||
|
Amortizable
intangible assets, net
|
19,936
|
26,941
|
||||||
|
Goodwill
|
143,475
|
137,827
|
||||||
|
Deferred
tax asset
|
109
|
109
|
||||||
|
Other
assets
|
7,985
|
7,093
|
||||||
|
Total
assets
|
$
|
274,351
|
$
|
231,841
|
||||
|
LIABILITIES,
CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY
|
||||||||
|
CURRENT
LIABILITIES
|
||||||||
|
Accounts
payable
|
$
|
31,936
|
$
|
19,302
|
||||
|
Accrued
liabilities
|
31,030
|
23,329
|
||||||
|
Current
portion of long-term debt
|
33,048
|
33,006
|
||||||
|
Current
income taxes
|
103
|
187
|
||||||
|
Current
portion of capital lease obligations
|
5,203
|
5,097
|
||||||
|
Total
current liabilities
|
101,320
|
80,921
|
||||||
|
Long-term
debt, net of current portion
|
132,498
|
127,163
|
||||||
|
Long-term
capital lease obligations, net of current portion
|
814
|
4,244
|
||||||
|
Other
long-term liabilities
|
3,186
|
-
|
||||||
|
Total
liabilities
|
237,818
|
212,328
|
||||||
|
Series
B Convertible Preferred Stock (liquidation value of $26,528 at October
2, 2010)
|
13,265
|
-
|
||||||
|
STOCKHOLDERS'
EQUITY
|
||||||||
|
Series
A Convertible Preferred Stock
|
-
|
-
|
||||||
|
Common
Stock
|
3
|
1,091
|
||||||
|
Additional
paid-in capital
|
136,080
|
112,747
|
||||||
|
Accumulated
other comprehensive income (loss)
|
89
|
60
|
||||||
|
Accumulated
deficit
|
(112,904
|
)
|
(94,385
|
)
|
||||
|
Total
stockholders' equity
|
23,268
|
19,513
|
||||||
|
Total
liabilities, convertible preferred stock, and stockholders'
equity
|
$
|
274,351
|
$
|
231,841
|
||||
6
|
UNITEK
GLOBAL SERVICES, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Amounts
in thousands, except per share data)
|
|
(Unaudited)
|
|
Three
Months Ended
|
Nine
months Ended
|
|||||||||||||||
|
October
2, 2010
|
October
3, 2009
|
October
2, 2010
|
October
3, 2009
|
|||||||||||||
|
Revenues
|
$
|
110,121
|
$
|
72,579
|
$
|
304,928
|
$
|
210,491
|
||||||||
|
Costs
of revenues
|
91,933
|
61,327
|
257,770
|
181,388
|
||||||||||||
|
Gross
profit
|
18,188
|
11,252
|
47,158
|
29,103
|
||||||||||||
|
Selling,
general and administrative expenses
|
9,813
|
5,410
|
27,532
|
18,206
|
||||||||||||
|
Depreciation
and amortization
|
6,199
|
7,351
|
19,912
|
20,784
|
||||||||||||
|
Operating
income (loss)
|
2,176
|
(1,509
|
)
|
(286
|
)
|
(9,887
|
)
|
|||||||||
|
Interest
expense
|
5,972
|
4,897
|
17,385
|
13,202
|
||||||||||||
|
Other
expense, net
|
29
|
59
|
175
|
104
|
||||||||||||
|
Loss
from continuing operations before income taxes
|
(3,825
|
)
|
(6,465
|
)
|
(17,846
|
)
|
(23,193
|
)
|
||||||||
|
Income
tax expense
|
(48
|
)
|
(297
|
)
|
(151
|
)
|
(1,067
|
)
|
||||||||
|
Loss
from continuing operations
|
(3,873
|
)
|
(6,762
|
)
|
(17,997
|
)
|
(24,260
|
)
|
||||||||
|
Income
(loss) from discontinued operations
|
(2
|
)
|
(220
|
)
|
(461
|
)
|
555
|
|||||||||
|
Net
loss
|
$
|
(3,875
|
)
|
$
|
(6,982
|
)
|
$
|
(18,458
|
)
|
$
|
(23,705
|
)
|
||||
|
Net
income (loss) per share - basic:
|
||||||||||||||||
|
Continuing
operations
|
$
|
(0.79
|
)
|
$
|
(1.73
|
)
|
$
|
(3.76
|
)
|
$
|
(6.23
|
)
|
||||
|
Discontinued
operations
|
0.00
|
(0.06
|
)
|
(0.10
|
)
|
0.14
|
||||||||||
|
Net
loss
|
$
|
(0.79
|
)
|
$
|
(1.79
|
)
|
$
|
(3.86
|
)
|
$
|
(6.09
|
)
|
||||
|
Net
income (loss) per share - diluted:
|
||||||||||||||||
|
Continuing
operations
|
$
|
(0.79
|
)
|
$
|
(1.73
|
)
|
$
|
(3.76
|
)
|
$
|
(6.23
|
)
|
||||
|
Discontinued
operations
|
0.00
|
(0.06
|
)
|
(0.10
|
)
|
0.14
|
||||||||||
|
Net
loss
|
$
|
(0.79
|
)
|
$
|
(1.79
|
)
|
$
|
(3.86
|
)
|
$
|
(6.09
|
)
|
||||
|
Weighted
average shares of common stock outstanding:
|
||||||||||||||||
|
Basic
|
4,885
|
3,896
|
4,785
|
3,896
|
||||||||||||
|
Diluted
|
4,885
|
3,896
|
4,785
|
3,896
|
||||||||||||
7