- Company Updates Fiscal 2009 Outlook -
MT. AIRY, N.C., Feb. 3 /PRNewswire-FirstCall/ -- Pike Electric Corporation
(NYSE: PEC), one of the nation's largest providers of energy solutions,
including engineering, powerline construction, substation construction, EPC,
and renewable energy, today announced the results for its fiscal second
quarter ended December 31, 2008.
Fiscal 2009 Second Quarter Results
Total revenues for the second quarter of fiscal 2009 increased $1.5
million to $144.6 million, compared to $143.1 million in the second quarter of
fiscal 2008. Core revenues for the second quarter of fiscal 2009 increased
$10.2 million to $133.7 million, compared to $123.5 million for the second
quarter of fiscal 2008, including a $23.8 million contribution from EDS which
was acquired on September 1, 2008. Transmission revenues were up $4.3 million
or 42%. Distribution revenues were negatively impacted by reduced maintenance
spending across Pike's operating territory. Storm restoration revenues
totaled $10.9 million for the second quarter of fiscal 2009, down 44.4% from
the second quarter of fiscal 2008.
Gross profit for the second quarter of fiscal 2009 was $18.4 million, or
12.8% of revenue, compared to $24.5 million or 17.1% of revenue, for the
second quarter of fiscal 2008. The gross profit percentage decrease is due to
a decrease in equipment utilization due to a continued drop in utility
distribution projects, an increase in fuel costs primarily related to non-cash
mark-to-market derivative charges and lower storm revenues.
General and administrative expenses for the second quarter of fiscal 2009
were $11.2 million, or 7.7% of revenue, compared to $10.6 million, or 7.4% of
revenue, for the second quarter fiscal 2008. Second quarter included the
first full quarter of administrative costs related to the recently acquired
EDS business. Our general and administrative expenses were favorably impacted
in the quarter by the voluntary forfeiture of the 2009 fiscal year cash
incentives for our top seven management members. Those cash incentives would
have been due based on the established targets and estimated 2009 results. The
favorable impact of the forfeited cash incentives in the quarter totaled $1.3
million and included a reversal of $1.1 million in incentives recorded during
first quarter. Based on current estimates, the forfeiture will total an
additional savings of $0.6 million for the second half of fiscal 2009.
Interest expense decreased 27.7% to $2.7 million compared to the second
quarter of fiscal 2008 due to lower debt balances and lower interest rates.
Net income for the second quarter of fiscal 2009 totaled $2.6 million, or
$0.08 per diluted share, compared to net income of $5.1 million, or $0.15 per
diluted share, for the second quarter of fiscal 2008.
"Our second quarter was very challenging, as we had anticipated and
communicated," said J. Eric Pike, Chairman and Chief Executive Officer of
Pike. "The economic environment and tight credit markets continued to have a
strong impact on almost every industry in the country and our customers were
impacted as well."
"In light of these challenges, we remain focused on affecting the areas of
our business we can control," Pike added. "We continue to position ourselves
as a leading national Energy Solutions company and have made progress on
marketing the additional services we are able to offer since the EDS
acquisition. We have also taken further actions to reduce costs and improve
efficiencies in every aspect of the business."
"We are confident the steps we have been taking will allow us to enhance
our market position when spending returns to historical levels," Pike
continued. "While we expect the near term to remain difficult, particularly in
the distribution sector, we are confident in our newly diversified business
strategy. The drivers of long-term growth are still evident with the nation's
electrical infrastructure in need of upgrades and maintenance. We see the
outsourcing trend of our customers continuing, along with an increasing demand
for renewable energy solutions. Pike remains flexible and poised to take
advantage of these growth opportunities."
Six Months Ended December 31, 2008 Results
Total revenues for the six months ended December 31, 2008 were $330.1
million, as compared to $282.9 million for the first six months of fiscal
2008. Core powerline revenues were $241.5 million for the six months ended
December 31, 2008, as compared to $258.4 million for the same period in fiscal
2008. Storm restoration revenues totaled $88.6 million for the six-month
period compared to $24.5 million for the same period in fiscal 2008. Gross
profit totaled $63.4 million for the six months ended December 31, 2008, as
compared to $47.7 million for the same period in fiscal 2008. Gross profit as
a percentage of revenue increased to 19.2% from 16.9% in fiscal year 2008 due
primarily to the significant increase in higher-margin storm restoration
revenues. Net income for the first six months of fiscal 2009 totaled $20.8
million, or $0.62 per diluted share, compared to net income of $10.4 million,
or $0.31 per diluted share, for the first six months of fiscal 2008.
Outlook
Based on the deferral in utility distribution spending, the Company now
expects total revenues for its fiscal year ending June 30, 2009 to range from
$600 million to $620 million. This compares to the prior guidance of total
revenues in the range of $650 million to $680 million. As a result of cost
reductions and improved efficiencies, we expect diluted earnings per share to
remain in the previously announced range of $0.85 to $0.95.
Conference Call
Pike Electric will host a conference call today to discuss financial
results for its fiscal second quarter ended December 31, 2008 at 5:00 p.m. EST
on February 3, 2009. This call is being web cast and can be accessed by
visiting the Investor Center section of the Company's website at
http://www.pike.com . The call can be accessed live over the phone by dialing
(888) 713-4485, or for international callers, (913) 312-1386. A replay will
be available shortly after the call and can be accessed by dialing
(888) 203-1112, or for international callers, (719) 457-0820. The passcode
for the replay is 3847871. The replay will be available until February 10,
2009.
About Pike Electric
Pike Electric is one of the largest providers of energy solutions in the
United States, providing services including engineering, powerline
construction, substation construction, EPC, and renewable energy projects.
The Company is also a recognized leader in storm restoration. The Company's
common stock is traded on the New York Stock Exchange under the symbol PEC.
Visit Pike Electric's website at http://www.pike.com .
Safe Harbor
This press release contains forward-looking statements that relate to Pike
Electric's plans, objectives and estimate, and include those in the "Outlook"
section above. These statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and speak
only as of the date of this release. The terms "should," "believe," "plan,"
"expect," "anticipate," "estimate," "intend" and "project" and similar words
or expressions are intended to identify forward-looking statements. Various
risks, uncertainties and other factors could cause actual results to differ
materially from those expressed in any forward-looking statements. For a more
detailed list of such risks, uncertainties and factors, please refer to the
Risk Factor section of Pike Electric's Annual Report on Form 10-K for the
fiscal year ending June 30, 2008 and in its other filings with the Securities
and Exchange Commission. Pike Electric makes no commitment to update any
forward-looking statement or to disclose any facts, events, or circumstances
after the date of this release that may affect the accuracy of any
forward-looking statement, except as may be required by applicable law.
PIKE ELECTRIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three months ended Six months ended
December 31, December 31,
2008 2007 2008 2007
Revenues $144,586 $143,116 $330,093 $282,852
Cost of operations 126,150 118,653 266,696 235,110
Gross profit 18,436 24,463 63,397 47,742
General and administrative expenses 11,169 10,564 24,470 20,876
Loss on sale and impairment of
property and equipment 612 1,939 854 1,984
Income from operations 6,655 11,960 38,073 24,882
Other expense (income):
Interest expense 2,730 3,774 5,066 8,146
Other, net (301) (64) (508) (125)
Total other expense 2,429 3,710 4,558 8,021
Income before income taxes 4,226 8,250 33,515 16,861
Income tax expense 1,655 3,171 12,675 6,498
Net income $2,571 $5,079 $20,840 $10,363
Earnings per share:
Basic $0.08 $0.15 $0.63 $0.32
Diluted $0.08 $0.15 $0.62 $0.31
Shares used in computing earnings
per share:
Basic 33,012 32,833 32,999 32,764
Diluted 33,699 33,668 33,747 33,677
PIKE ELECTRIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
December 31, June 30,
2008 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $5,591 $11,357
Accounts receivable from customers, net 78,393 62,224
Costs and estimated earnings in
excess of billings on uncompleted contracts 54,344 40,410
Inventories 9,715 8,343
Prepaid expenses and other 5,424 5,123
Deferred income taxes 14,011 15,376
Total current assets 167,478 142,833
Property and equipment, net 225,091 229,119
Goodwill 104,387 94,402
Other intangibles, net 42,372 40,065
Deferred loan costs, net 2,378 2,778
Other assets 1,464 1,463
Total assets $543,170 $510,660
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $12,090 $10,867
Accrued compensation 19,178 22,157
Billings in excess of costs and
estimated earnings on uncompleted contracts 6,732 397
Accrued expenses and other 8,931 5,018
Income taxes payable 6,331 442
Current portion deferred compensation 1,365 3,666
Current portion of insurance claim accruals 30,637 28,873
Total current liabilities 85,264 71,420
Long-term debt, net of current portion 140,500 140,500
Insurance and claim accruals, net of
current portion 6,694 7,989
Deferred compensation, net of current portion 5,241 6,283
Deferred income taxes 57,474 62,416
Other liabilities 5,009 1,100
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001 per share;
100,000 shares authorized; no shares issued
and outstanding - -
Common stock, par value $0.001 per share;
100,000 shares authorized; 33,385 and 33,183
shares issued and outstanding at December 31,
2008 and June 30, 2008, respectively 6,427 6,427
Additional paid-in capital 150,625 148,288
Accumulated other comprehensive loss,
net of taxes (1,947) (806)
Retained earnings 87,883 67,043
Total stockholders' equity 242,988 220,952
Total liabilities and stockholders' equity $543,170 $510,660
SOURCE Pike Electric Corporation
CONTACT:
Lara Travars
Pike Electric Corporation
+1-336-719-4492
Web site: http://www.pike.com
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