Mastech Holdings reports Q2 2014 results
6% Year-Over-Year Revenue Growth
4% Sequential Decline in Consultants on Billing as an Early Project Termination Impacted Quarterly Performance
11% Year-Over-Year Increase in Diluted Earnings Per Share from Continuing Operations.
Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology staffing services, announced today its financial results for the second quarter ended June 30, 2014.
Second Quarter Results:
Revenues from continuing operations for the second quarter of 2014 totaled $27.7 million, which represented a 6% increase over the corresponding quarter last year. Gross profit from continuing operations in the second quarter of 2014 was $5.1 million compared to $5.0 million in the second quarter of 2013. Consolidated net income from continuing operations for the second quarter 2014 totaled $893,000 or $0.20 per diluted share, compared to $765,000 or $0.18 per diluted share, during the same period last year.
Demand for our IT staffing services remained in-line with activity levels of a quarter ago. However, new assignments declined from last quarter's performance as our ratio of new assignments-to-activity levels fell during the second quarter. Additionally, we had an unexpected project termination during the quarter which resulted in an overall decline in consultants on billing. Gross margins from continuing operations in the second quarter of 2014 were 18.5%, which was higher than gross margins reported in first quarter 2014, but below our 19.0% gross margin performance of a year earlier.
Kevin Horner, Mastech's Chief Executive Officer stated, "We are disappointed with our performance in the second quarter when compared to our historical trend lines. The challenges that we faced in second quarter plainly illustrate a pressing need to accelerate the scale of our recruitment engine. With demand likely to remain at healthy levels during the second half of the year, we will look to aggressively ramp-up our off-shore recruiter hiring."
Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our financial position at June 30, 2014 remains strong, with no short-term borrowings outstanding and cash balances on hand of $1.2 million. During the quarter, our Days Sales Outstanding ("DSO") measurement improved by 6-days from last quarter and now stands at 50-days. In July, we expanded and extended for three years our credit facility withPNC Bank, which will continue to provide us the financial flexibility to capitalize on future market opportunities."