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Schuff International Announces Financial and Operating Results for Third Quarter 2010

^{Published on 2010-10-25 05:07:58 - Market Wire}
 

PHOENIX--([ BUSINESS WIRE ])--Schuff International, Inc. (Pink Sheets: SHFK), a family of companies providing fully integrated steel construction services, today reported financial and operating results for the third quarter ended October 3, 2010.

"During the third quarter, our backlog grew sequentially by $55 million, to nearly $221 million, the first such increase in several quarters. This move was fueled by major new wins among public works projects and healthcare facilities"

Third Quarter 2010 Results:

Revenues for the third quarter ended October 3, 2010 were $66.0 million, a decrease of 38.6 percent from revenues of $107.4 million for the third quarter ended October 4, 2009.

Gross profit as a percentage of revenue was 14.8 percent for the third quarter ended October 3, 2010, compared with 24.4 percent for the third quarter ended October 4, 2009.

Operating income for the third quarter of 2010 was $0.8 million, down 94.1 percent from $13.4 million in the year-ago quarter. Operating margin decreased to 1.2 percent from 12.5 percent in the year-ago period, due primarily to lower revenues earned during the quarter.

Net income for the quarter was $0.3 million, or $0.03 per diluted share, versus $7.8 million, or $0.85 per diluted share, a year ago.

Schuff Internationala™s backlog was $220.6 million ($187.8 million under contracts or purchase orders and $32.8 million under letters of intent) at October 3, 2010 compared with $165.4 million ($150.1 million under contracts or purchase orders and $15.4 million under letters of intent) at July 4, 2010. Approximately $90.4 million, representing 41.0 percent of the companya™s backlog at October 3, 2010, was attributable to five contracts, letters of intent, notices to proceed or purchase orders.

Nine Months 2010 Results:

Revenues for the nine months ended October 3, 2010 were $214.5 million, a decrease of 37.0 percent from year-ago revenues of $340.3 million.

Gross profit as a percentage of revenue was 15.4 percent for the nine months ended October 3, 2010, compared with 23.6 percent for the year-ago period.

Operating income for the first nine months of 2010 was $4.8 million, down 88.7 percent from $42.7 million for the first nine months of 2009. Operating margin decreased to 2.3 percent from 12.6 percent in the year-ago period.

Net income for the nine months ended October 3, 2010 was $2.5 million, or $0.26 per diluted share, versus $25.4 million, or $2.73 per diluted share, a year ago.

aAs we expected, continued weakness in the commercial construction sector led to lower revenues and thin margins for the third quarter of 2010,a said Scott A. Schuff, president and CEO. aWea™re in the third year of this economic downturn that has all but halted major new commercial construction projects, especially in the Las Vegas market, which had been a major growth driver for Schuff. In addition, relatively low energy prices have slowed new oil and gas-related construction in the Southwest, another historically strong market for us.

aDuring the third quarter, our backlog grew sequentially by $55 million, to nearly $221 million, the first such increase in several quarters. This move was fueled by major new wins among public works projects and healthcare facilities,a added Schuff.

aHowever, we believe that a sustained recovery will require the return of commercial construction activity in multiple regions in the U.S. In the meantime, I am extremely proud of the agility and entrepreneurial energy our team has shown in bidding and winning key projects that emerged in this difficult climate. In addition, the disciplined cost controls and reductions we instituted more than a year ago have allowed us to remain profitable and financially sound at a time when others in our industry have not fared as well,a concluded Schuff.

Schuff International, Inc. (Pink Sheets: SHFK) and its family of steel companies is the largest steel fabrication and erection company in the United States. The 34-year old company executes projects throughout the country as well as internationally. Schuff offers integrated steel construction services from a single source including design-build, design-assist, engineering, BIM participation, 3D steel modeling/detailing, fabrication, advanced field erection, joist and joist girder manufacturing, project management, and single-source steel management systems. Schuff International, Inc. employs approximately 1,300 people throughout the country. For more information, visit [ www.schuff.com ].

Certain statements in this news release may contain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. These risks and uncertainties, some of which are beyond the control of the company, include, but are not limited to, the company's ability to successfully and timely complete construction projects; the companya™s ability to convert backlog into revenue; the potential delay, suspension, termination, or reduction in scope of a construction project; the continuing validity of the underlying assumptions and estimates of total forecasted project revenues, costs and profits and project schedules; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings; the availability of borrowed funds on terms acceptable to the company; the ability to retain certain members of management; the ability to obtain surety bonds to secure its performance under certain construction contracts; possible labor disputes or work stoppages within the construction industry; the ability of project owners to obtain and/or continue to maintain financing for projects; possible changes or developments in domestic and worldwide financial, political and social circumstances; and actions taken or not taken by third parties, including the companya™s customers, suppliers, business partners, and competitors and legislative, regulatory, judicial and other governmental authorities and officials. The company cautions that these forward-looking statements are further qualified by other factors. The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.