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Mastech Holdings, Inc. Reports Third Quarter 2012 Results And Expands Share Repurchase Program

Mastech Holdings, Inc. Reports Third Quarter 2012 Results And Expands Share Repurchase Program

Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology and Specialized Healthcare staffing services, announced today its financial results for the third quarter ended September 30, 2012.

Third Quarter Results:

Revenues for the third quarter of 2012 totaled $25.6 million, which represented a 9% increase over the corresponding quarter last year and a slight improvement over second quarter 2012 revenues. Sequential revenue growth was achieved with one less billable day during the current quarter and a lower utilization rate due to the impact of summer vacations. Gross profit in the third quarter of 2012 was $4.9 million compared to $4.6 million in the third quarter of 2011. Consolidated net income for the third quarter 2012 totaled $601,000, or $0.18 per diluted share, compared to $441,000, or $0.12 per diluted share, during the same period last year.

Demand for our staffing services remained solid. We were able to grow our IT billable consultant-base by 8% during the quarter and achieved sequential revenue growth for the ninth consecutive quarter in our healthcare staffing business. Overall gross margins in the third quarter were 19.1%, which was flat when compared to the previous quarter and lower than the 19.8% gross margins reported a year earlier. Lower permanent placement revenues and supply-side pricing pressures on existing assignments have impacted our gross margin performance in the current quarter.

Kevin Horner, Mastech's Chief Executive Officer stated, "Third quarter was a very positive quarter for the Company on a number of fronts. We significantly expanded our IT consultant-base during the quarter we continued to drive superior top-line revenue growth when compared to most of our industry peers and we delivered bottom-line earnings per share results that were 50% greater than those of a year ago. Operationally, we are starting to see some payback from investments aimed at strengthening our recruitment capabilities. While we have more work to do, I believe that our cost-effective, highly scalable recruitment organization will play an important role in enhancing the value proposition that we provide our clients."

Commenting on the Company's financial position, Jack Cronin, Mastech's Chief Financial Officer, stated, "Our balance sheet remains strong with cash on hand of $3.3 million no outstanding debt and access to $15.0 million of borrowing capacity. During the first nine months of 2012, we spent $2.5 million to repurchase 436,026 shares of common stock under our share repurchase program. At September 30, 2012 we had 171,088 shares still available for purchase under this program, which originally authorized the repurchase of 750,000 shares and is set to expire in December 2012. I'm pleased to announce that our Board of Directors has elected to increase the number of shares authorized to be purchased under this program by 250,000 and has extended the duration of the program for an additional two years, through December 22, 2014."

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