Turnkey Capital (PK) (USOTC:TKCI)
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The Keith Companies Reports Year End Results With Year Over Year Increases in
The Fourth Quarter
IRVINE, Calif., Feb. 12 /PRNewswire-FirstCall/ -- The Keith Companies, Inc. ,
an engineering and consulting services firm, today announced financial results
for the fourth quarter and year ended December 31, 2003.
Net revenue for the three months ended December 31, 2003 increased 1.9% to $22.8
million, while income from continuing operations for the same period increased
to $1.9 million and resulted in diluted earnings per share from continuing
operations of $0.24. This compares to net revenue for the fourth quarter of
2002 of $22.3 million with income from continuing operations of $1.8 million and
diluted earnings per share from continuing operations of $0.23.
"We are very pleased with our year over year growth for the fourth quarter,
which was driven by increasing demand for our residential real estate services
in both Northern and Southern California," said Aram Keith, Chairman and CEO of
TheKeith Companies. "In the fourth quarter, our real estate services generated
organic net revenue growth of approximately 10.6%. The net revenue growth in
this area was offset by continued weakness in the energy/industrial segment,
although we continueto be encouraged by the increased level of interest for
significant projects in this area in the future."
Net revenue for the twelve months ended December 31, 2003 decreased 0.9% to
$90.7 million, from $91.6 million for the twelve months ended December 31, 2002.
Income from continuing operations for the twelve months ended December 31, 2003
decreased to $7.2 million, and resulted in diluted earnings per share from
continuing operations of $0.91 compared to $8.4 million or diluted earnings per
share from continuing operations of $1.07 for the twelve months ended December
31, 2002. Two notable items impacted the previous year's results. Interest
expense and other income during 2002 was positively impacted by $498,000 (net of
income taxes) of purchase price adjustments associated with the Company's
acquisitions of Crosby, Mead, Benton & Associates and Hook & Associates
Engineering, Inc. Other income in the fourth quarter of 2003 was positively
impacted by a $45,000 (net of income taxes) purchase price adjustment associated
with the Company's acquisition of ALNM Group, Inc.
Financial Position
The Company's December 31, 2003 balance sheet remains strong with cash and
securities of $28.9 million, a current ratio of 4.7:1, a debt to equity ratio of
0.00:1 (excluding issuable common stock) and shareholders' equity of $72.0
million or $9.40 per common share outstanding at December 31, 2003.
Financial Guidance
In adherence with the U.S. Securities and Exchange Commission's (SEC) Regulation
Fair Disclosure, The Keith Companies provides the following guidance for all
investors and encourages all current and potential investors to review the
disclosure regarding forward-looking statements in this press release as well as
all financial documents filed with the SEC. All guidance amounts are before
special items, if any, and exclude the impact of any potential future
acquisitions.
The Company's financial guidance for 2004 remains unchanged from the guidance
previously provided. The Company estimates its full year 2004 net revenue may
range from $90.0 million to $100.0 million with estimated diluted earnings per
share ranging from $0.88 to $1.04 ($0.19 to $0.22 for the first quarter; $0.22
to $0.26 for the second quarter; $0.26 to $0.31 for the third quarter; and $0.21
to $0.25 for the fourth quarter) based upon an estimated 8.1 million weighted
average number of diluted shares outstanding for the year. The higher range of
the guidance is primarily based upon significant improvements in the demand for
services in the Company's energy/industrial segment.
"Our position as one of the leading residential real estate engineering firms in
California provides excellent opportunities in a rapidly growing market," said
Keith. "Overall, the beginningof an economic recovery, infrastructure
deficiencies, overdue capital spending and legislative enticements, lead us to
believe that the energy and industrial markets will begin to experience growth
in the not too distant future. In addition to our planned organic growth, we
are encouraged by the prospects for generating incremental growth through the
acquisition of complementary firms that can expand our service offerings or
enable us to achieve better penetration in attractive markets. We are in
various stages of performing due diligence on a number of acquisition
candidates. Following our due diligence review, if we believe that the
acquisition of any of these candidates would enhance shareholder value, we
intend to negotiate definitive purchase agreements to acquire those candidates
to drive additional growth in future years."
Conference call to be broadcast live over the Internet
The Company will be hosting an earnings conference call, which will be broadcast
live over the Internet at 8:30 a.m. Pacific Time on February 12, 2004 and can be
accessed by all interested parties at http://www.viavid.net/ . To listen to the
live call, please go to the Web site at least fifteen minutes prior to the start
of the call to register, download, and install any necessary audio software.
For those unable to participate during the live broadcast, a replay will be
available shortly after the call. A copy of this press release and a link to
the Company's quarterly conference call will be available atthe Company's
website under the headings "TKC News" and "Investor Relations," respectively, at
http://www.keithco.com/ .
About The Keith Companies
The Keith Companies, Inc. is a fully integrated, multi-disciplined engineering
and consulting services company, with offices located throughout the Western and
Midwestern United States. The Keith Companies' professionals provide a wide
spectrum of skilled resources including land planning, engineering, surveying,
mapping, environmental studies, and water and cultural resources that are needed
to effectively plan, engineer, and design state-of- the-art private and public
facilities. Additionally, the Company provides mechanical, electrical,
chemical, power/energy engineering, and other industrial engineering services to
design and improve the efficiency and reliability of automated and manufacturing
processes, production lines, and fire protection systems. The Keith Companies
benefits from a diverse public and private client base varying from residential
and commercial real estate projects to institutional, manufacturing, and
processing facilities. For more information visit the Company's website at
http://www.keithco.com/ .
Certain statements in this news release may include forward-looking statements
that express our expectation, prediction, belief, or projection. These
statements involve known and unknown risks, uncertainties, and other factors
that may cause the actual results, performance, and achievement of The Keith
Companies to be materially and adversely different from any future results,
performance, or achievement expressed or implied by these forward- looking
statements. Factors that may cause actual results to differ from the
forward-looking statements contained in this release and that may affect the
Company's prospects in general include, but are not limited to: changes in the
economic growth in the United States (especially in California) and other major
international economies (especially Brazil), our ability to sustain our growth
and profitability, our ability to implement our acquisition strategy and to
successfully close and integrate acquired companies on a timely and
cost-effective basis, changes in the carrying value of our goodwill and other
long-term assets, our failure to accurately estimate costs on fixed-price
contracts or contracts with not-to-exceed provisions, the uncertain timing of
awards and contracts, the ability to maintain acquired companies' profit
margins and/or client base, outcomes of pendingand future litigation, the
ongoing financing of public works and infrastructure enhancements and
refurbishment, our ability to attract and retain employees, the demand for
electricity and the impact on power providers' plans for expanding generation
facilities, increasing competition by foreign and domestic companies, a downturn
in the real estate market, risks inherent in doing business outside the United
States, including the difficulty of enforcing contracts, political instability
and foreign currency fluctuations and potential exchange restrictions, the
short- and long-term impact of terrorist activities and resulting political and
military policies, and other factors as are described in the Company's filings
with the Securities and Exchange Commission. The forward-looking information
set forth in this press release is as of the date indicated above and we
undertake no duty to update this information.
For further information, please contact: Aram Keith, Chairman of the Board &
CEO of The Keith Companies, Inc., +1-949-923-6001, or Fax, +1-949-923-6026; or
Investor Relations, Tricia Ross of Financial Relations Board, +1-310-407-6540.
TABLES FOLLOW
The Keith Companies, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended Years Ended
December 31, December 31,
2003 2002 2003 2002
(Unaudited)
Gross revenue $25,031,000 $24,657,000 $99,950,000 $106,487,000
Subcontractor
costs 2,264,000 2,323,000 9,206,000 14,889,000
Net revenue 22,767,000 22,334,000 90,744,000 91,598,000
Costs of revenue 14,537,000 14,597,000 58,837,000 59,716,000
Gross profit 8,230,000 7,737,000 31,907,000 31,882,000
Selling, general
and administrative
expenses 5,271,000 4,859,000 20,592,000 19,105,000
Income from
operations 2,959,000 2,878,000 11,315,000 12,777,000
Interest income,
net 69,000 79,000 264,000 431,000
Other (income)
expenses, net (71,000) 11,000 (259,000) (625,000)
Income before
provision for
income taxes
and discontinued
operations 3,099,000 2,946,000 11,838,000 13,833,000
Provision for
income taxes 1,208,000 1,149,000 4,617,000 5,397,000
Income from
continuing
operations 1,891,000 1,797,000 7,221,000 8,436,000
Loss from
discontinued
operations,
net of income
taxes -- 97,000 -- 628,000
Net income $1,891,000 $1,700,000 $7,221,000 $7,808,000
Earnings per share
from continuing
operations:
Basic $0.25 $0.24 $0.95 $1.15
Diluted $0.24 $0.23 $0.91 $1.07
Loss per share
from discontinued
operations, net
of income taxes:
Basic $-- $(0.01) $-- $(0.09)
Diluted $-- $(0.01) $-- $(0.08)
Earnings per share:
Basic $0.25 $0.23 $0.95 $1.06
Diluted $0.24 $0.22 $0.91 $0.99
Weighted average
number of shares
outstanding:
Basic 7,637,880 7,470,448 7,615,264 7,363,073
Diluted 7,963,622 7,858,738 7,957,344 7,868,877
The Keith Companies, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, December 31,
2003 2002
Assets
Current assets:
Cash and cash equivalents $24,277,000 $20,333,000
Securities held-to-maturity 4,600,000 3,164,000
Contracts and trade receivables, net 19,844,000 18,771,000
Costs and estimated earnings
in excess of billings 9,997,000 10,392,000
Prepaid expenses and other current assets 1,468,000 1,367,000
Total current assets 60,186,000 54,027,000
Equipment and leasehold improvements, net 4,067,000 4,831,000
Goodwill, net 23,059,000 23,056,000
Other assets 224,000 312,000
Total assets $87,536,000 $82,226,000
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of capital lease obligations $-- $52,000
Trade accounts payable 1,640,000 1,818,000
Accrued employee compensation 4,037,000 3,722,000
Current portion of deferred
tax liabilities 2,444,000 3,065,000
Other accrued liabilities 3,078,000 4,484,000
Billings in excess of costs
and estimated earnings 1,571,000 1,273,000
Total current liabilities 12,770,000 14,414,000
Capital lease obligations,
less current portion -- 18,000
Issuable common stock 792,000 2,215,000
Deferred tax liabilities 1,560,000 1,675,000
Accrued rent 452,000 292,000
Total liabilities 15,574,000 18,614,000
Shareholders' equity:
Preferred stock -- --
Common stock 8,000 8,000
Additional paid-in-capital 45,295,000 44,166,000
Retained earnings 26,659,000 19,438,000
Total shareholders' equity 71,962,000 63,612,000
Total liabilities and
shareholders' equity $87,536,000 $82,226,000
The Keith Companies Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Year Ended
December 31,
2003 2002
Cash flows from operating activities:
Net income $7,221,000 $7,808,000
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 2,231,000 2,283,000
Loss on sale/impairment of equipment 29,000 93,000
Reduction in purchase price
of acquired companies (137,000) (769,000)
Tax benefit from exercise
of stock options 69,000 89,000
Stock compensation expense 37,000 --
Changes in operating assets
and liabilities, net of effects
from acquisition in 2002:
Contracts and
trade receivables, net (1,269,000) 3,369,000
Costs and estimated earnings
in excess of billings 304,000 (1,545,000)
Prepaid expenses and other assets (53,000) 108,000
Trade accounts payable and
accrued liabilities (652,000) (270,000)
Billings in excess of costs
and estimated earnings 298,000 (1,042,000)
Deferred tax liabilities (728,000) (28,000)
Net cash provided by
operating activities $7,350,000 $10,096,000
Cash flows from investing activities:
Net cash expended related to or
for acquisitions (722,000) (8,048,000)
Additions to equipment and
leasehold improvements (1,548,000) (1,872,000)
Proceeds from (purchases of)
securities held-to-maturity (1,436,000) 8,357,000
Proceeds from sales of equipment 57,000 134,000
Net cash used in
investing activities$(3,649,000) $(1,429,000)
Cash flow from financing activities:
Principal payments on long-term debt
and capital lease obligations,
including current portion (52,000) (705,000)
Proceeds from exercise of stock options 295,000 159,000
Net cash provided by (used in)
financing activities $243,000 $(546,000)
Net increase in cash and
cash equivalents 3,944,000 8,121,000
Cash and cash equivalents,
beginning of period $20,333,000 $12,212,000
Cash and cash equivalents,
end of period $24,277,000 $20,333,000
DATASOURCE:The Keith Companies, Inc.
CONTACT: Aram Keith, Chairman of the Board & CEO of The Keith Companies,
Inc., +1-949-923-6001, or Fax, +1-949-923-6026; or Investor Relations, Tricia
Ross of Financial Relations Board, +1-310-407-6540
Web site: http://www.keithco.com/