VERSAR INC. FOR IMMEDIATE RELEASE September 25, 2017
VERSAR, INC ANNOUNCES FISCAL YEAR 2017 FINANCIAL RESULTSOffices Headquarters Springfield, VA
Inside the U.S.Aiea, HI Atlanta, GA Chandler, AZ Charleston, SC Columbia, MD Denver, CO Dulles, VA
El Paso, TX Germantown, MD Newport News, VA Oceanside, CA Richardson, TX San Antonio, TX South Easton, MA
Outside the U.S. Abu Dhabi, UAE Baghdad, Iraq Clark, Philippines Kabul, Afghanistan Springfield, VA - September, 2017 - Versar, Inc. (NYSE American: VSR) ("Versar"), today announced financial results for fiscal 2017, ended June 30, 2017. The Form 10-K will be filed with the Securities and Exchange Commission (SEC) later today. In addition, Bank of America and Versar signed the Seventh Forbearance Agreement on September 22, 2017 (the "Effective Date") extending the forbearance period to November 17, 2017, at the latest. Versar will file an 8-K related to the Seventh Forbearance Agreement by no later than September 28, 2017.Fiscal 2017 Financial Results
Fiscal 2017 gross revenue decreased 33% to $111.8 million, compared to revenues of $167.9 million during fiscal 2016. The decrease is largely attributable to the Dover Air Force Base (DAFB) project wind down, reduced work from the Environmental Protection Agency (EPA), Performance Based Remediation (PBR) wind down, the sale of PPS (Versar's personal protective gear subsidiary sold in April), Versar Security Systems (VSS) lower than expected revenues, decreased work in Iraq and Afghanistan, and loss of contracts previously held. Both the DAFB and PBR ramp-downs were anticipated with those projects scheduled to end in calendar year 2017 and 2020, respectively.
Purchased services and materials decreased 43% to $60.9 million from $107.2 million. The decrease is a result of the slow-down in the Dover project, the decrease in EPA projects, reduced revenue levels within VSS, project loss reserves within PSG, a project at Fort Belvoir and the Cedar Point Shoreline project.
Direct costs of services and overhead for fiscal 2017 were $45 million, a decrease of 22% compared to 57.5 million during fiscal 2016. The decrease is a result of a cost savings plan we initiated during fiscal 2017, as well as full year impacts of the costs savings reductions we made in fiscal 2016. The wind down in DAFB was also a driver of that decrease.
Gross profit was up 84% from $3.2 million to $5.9 million. Cost savings actions just mentioned also contributed to the increase in gross profit for fiscal 2017. Gross margin percentage for fiscal 2017 was 5.3%, compared to gross margin of 1.9% last year. SG&A expenses for fiscal 2017 were $12.9 million, or 12% of gross revenue, compared to $13.0 million, or 8% of gross revenue in fiscal 2016. While this is an increase percent of gross revenue over the prior fiscal year, the overall level of SG&A is down.
Gross profit for the first nine months of fiscal 2017 was $5.9 million, compared to a gross profit of $6.8 million for the same period of fiscal 2016. Gross margin increased from 5% to 7%. While SG&A remained flat on a dollar amount, it increased as a percent of revenue from 7% to 11%. Included in the last nine months of SG&A are approximately $900 thousand related to requirements of the Bank of America Loan Amendment. In addition, the Company paid for two outside audits and unusual legal fees associated with our restructuring. Despite these additional expenses, the Company was able to control indirect costs.
For more information, please contact Investor Relations at:
6850 Versar Center, Suite 201 Springfield, VA 22151 703.642.6706 InvestorRelations@versar.com www.versar.com
Net loss for fiscal 2017 was $9.6 million, or a loss of 96 cents per share, as compared to a net loss of $37.9 million, or a net loss of $3.84 per share, in fiscal 2016.
Conference Call
Versar will host a conference call today, September 25, 2017 at 5:00 p.m. Eastern Time to discuss its business outlook and its operational performance and financial results for fiscal 2017.
The dial in number for the U.S. and Canada is toll free, 866-682-6100. The international dial in number is 404-267-0373. Participants should call in a few minutes before 5:00 PM Eastern Time.
For those unable to attend the conference call, a replay of the teleconference will be available until October 9, 2017 and may be accessed domestically by dialing 877-481-4010 and international callers may dial 919-882-2331. Callers must enter conference ID number 20093. Additionally, the replay will be available on Versar's Investor Relations website, http://www.versar.com/investorrelations/index.html.
VERSAR, INC., headquartered in Springfield, Virginia, is a publicly-traded global project management company providing sustainable value oriented solutions to government and commercial clients in the construction management, environmental services, and professional services market areas. VERSAR operates the following website: www.versar.com.Find out more about VERSAR at
https://twitter.com/VersarInc https://www.facebook.com/VersarInc http://www.linkedin.com/company/38251
This news release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended June 30, 2017, as updated from time to time in the Company's periodic filings. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements.
Contact: Investor Relations Robert Ferri
(703) 642-6706 Robert Ferri Partners
InvestorRelations@Versar.com (415) 575-1589
robert.ferri@robertferri.com
ASSETS
Current assets
Consolidated Balance Sheets
(In thousands, except share amounts)
June 30,
2017
As of
July 1,
2016
Cash and cash equivalents | $ | 1,039 | $ | 1,549 |
Accounts receivable, net | 31,753 | 47,675 | ||
Inventory, net | - | 221 | ||
Prepaid expenses and other current assets | 1,645 | 1,007 | ||
Income tax receivable | 1,352 | 1,513 | ||
Total current assets | 35,789 | 51,965 | ||
Property and equipment, net | 839 | 1,328 | ||
Deferred income taxes, non-current Goodwill Intangible assets, net | - - 6,072 | - - 7,248 | ||
Other assets | 1,647 | 775 | ||
Total assets | $ | 44,347 | $ | 61,316 |
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable | $ 15,601 | $ 18,156 |
Billings in excess of revenue | 9,378 | 7,156 |
Accrued salaries and vacation | 2,272 | 2,478 |
Bank line of credit | 7,083 | 14,854 |
Notes payable, current | 4,407 | 3,831 |
Other current liabilities | 8,563 | 7,724 |
Total current liabilities | 47,304 | 54,199 |
Notes payable, non-current | - | 2,494 |
Other long-term liabilities | 2,824 | 3,555 |
Total liabilities | 50,128 | 60,248 |
Commitments and contingencies | ||
Stockholders' equity (deficit) | ||
Common stock $.01 par value; 30,000,000 shares authorized; 10,266,027 shares issued and 9,923,710 shares outstanding as of June 30, 2017; 10,217,227 shares issued and 9,982,778 shares outstanding as of July 1, 2016. | 103 | 102 |
Capital in excess of par value | 32,857 | 31,128 |
Accumulated deficit | (37,021) | (27,448) |
Treasury stock, at cost Accumulated other comprehensive loss; foreign currency translation | (1,494) (226) | (1,480) (1,234) |
Total stockholders' equity (deficit) | (5,781) | 1,068 |
Total liabilities and stockholders' equity | $ 44,347 | $ 61,316 |
Consolidated Statements of Operations (In thousands, except per share amounts)
For the Fiscal Year Ended June 30, 2017 July 1, 2016 | |
GROSS REVENUE | $ 111,821 $ 167,917 |
Purchased services and materials, at cost | 60,860 107,199 |
Direct costs of services and overhead | 45,061 57,544 |
GROSS PROFIT | 5,900 3,174 |
Selling, general and administrative expenses | 12,873 13,031 |
Other operating expense | 1,243 1,937 |
Goodwill impairment | - 20,331 |
Intangible impairment | - 3,812 |
OPERATING LOSS FROM OPERATIONS | (8,216) (35,937) |
OTHER (INCOME) EXPENSE | |
Interest income | (14) (19) |
Interest expense | 1,446 702 |
LOSS BEFORE INCOME TAXES | (9,648) (36,620) |
Income tax (benefit) expense | (75) 1,267 |
NET LOSS | $ (9,573) $ (37,887) |
NET LOSS PER SHARE-BASIC and DILUTED | $ (0.96) $ (3.84) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING-BASIC AND DILUTED | 10,002 9,857 |
Versar Inc. published this content on 25 September 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 September 2017 15:09:06 UTC.
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